The futures are down big time. With the markets showing weakness already, is this the infliction point we have been waiting for all these days? I somehow think this is not yet the time even when the market goes down on coming Monday. The following is SPX weekly chart.
On the chart we see that this rise from January is not the longest one. The one immediately before was during the QE2 as on the right side of the chart. The index broke the trend line, then went back to re-test the highs few more times, before rolling over.
Why it should be any different this time?
It is certain that the market will drop on Monday. It is a question of how much. The drop on Monday will be the 4th consecutive red day. I will borrow a chart from Cobra which shows that it will be a good buying opportunity, short term.
It has been a strong up trending market for over three months now and I doubt if it will turn on a dime. I do not want to jump the gun and start shorting it, just to get another head fake. I would rather follow a confirmed trend. End of the day, Monday will give us more clear picture about the immediate future.
Till then, enjoy the long weekend. Thank you for reading http://bbfinance.blogspot.ca/ . Please forward it to your friends and join me in Twitter for live market commentary. (@BBFinanceblog).