What a pathetic showing by the S&P 500. It’s been completely unable to rally despite an extremely oversold condition.
Our original price target for the S&P rally was 1091-1123. We rallied into the lower end of that range, reversed, and that was it.
When stocks can’t maintain a countertrend bounce (and also when that bounce occurs on low volume), we have no choice but to get bearish once again.
The S&P 500 has fallen – and it can’t get it. Are we heading off a cliff? (Source: StockCharts.com)
So, we shorted the S&P 500 again yesterday morning via the futures market. A modest rally from here is possible – that doesn’t worry me – this position should be a keeper for the intermediate term.
Stocks are primed to fall off a cliff…and we want to be short if and when that happens.