Stock Market Outlook for July 13, 2010: Big Decline Ahead?

Stock Market Outlook for July 13, 2010: Big Decline Ahead?

Not much of note today, as we saw a very lazy summer trading day.  Are some fireworks just around the corner?

Some thoughts for the rest of the trading week:

  • NYSE decliners led advancers today by about 2 to 1 (Source: Seeking Alpha) – a sign of things to come?
  • Earnings season is kicking off – it’ll be interesting to see if fairly bullish expectations are beaten.  I’m thinking they are probably too high – we’ll see.
  • When this rally covered back about half of the losses, I went short again at the 1068.25 mark.  Obviously it was too early, but I felt that the risk/reward was favorable (See: Why I Can’t Wait to Short the S&P 500 Again)
  • S&P 500 Short Position July 12 2010
  • As mentioned last week – we’ve retraced about 50% of the last decline.  Optimism may not be “back”, but it’s at least out of the gutter.  So while we could see a further rally from here, it’s not required.  The stock market could turn back down again at any moment.
  • And don’t forget – we are still below the 200-day moving average on the S&P (red line below).  When this condition exists, you’re usually best off being either short the market, or out of it.

S&P 500 Price Chart July 13 2010 Base chart courtesy of (with my pretty edits)