NFTRH139 found some technical reasons why the world is not ending, despite the short term corrections happening all around. There is a thing called a 'healthy correction', but then, the average wise guy is not interested in healthy, is he? No, he is interested in scratch, coin... being a player. The S&P 500 has broken below support, but can bounce from over sold at any time back up to the down-sloping moving averages. Let's see what the Wizard has to say today.
Beyond this, SPX is targeting support at around 1250 or so. A nagging caveat to the bear case is the ease with which the dumb money is joining me in bearish territory. It was hard to be bearish a month ago. Not so now, and the dumb money always does the comfortable thing. Sentiment supports a short term bounce.
In the precious metals, it is no different. Gold bugs have run fleeing from RYDEX funds and as has been the case for some time now, the risk is low in PM land, despite what short term price may do. You never buy the giddiness in PM's.
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| From the highly recommended Sentimentrader.com |
Technical targets ultimately point lower for the broad markets (including PM's), QE3 is apparently off the table, but I read somewhere about the possibility of the Fed using artificially low short term rates - isn't this decline in the long bond's yield mighty handy? - to feed the banks, which would then proxy out QE3 in a more stealth manner; and make a handy mark up while doing so. Everybody wins. Well, not really and not by a long shot. But they will shoot for the happy ending one way or another in the myopic way powerful clerks tend to.
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