Thursday, March 10, 2011

It's All About Oil ... Market Looking East to Saudi Arabia

SGS is Long (as of close of 12/1/2010)
RTS 20110103 Long Portfolio

Today, SPX, RUT and NAZ joined TRAN and closed below their 50 D-SMA with heavy volume and lousy breath.  That's no joke.  Additionally SPX broke solidly and heavily through its symmetric triangle price formation hence confirming a very probable drop to a price objective of 1244.

Too much blood has been let out now. It'll take some time for the raging big bull to get back on its feet and push the market up again. My guess is about a month of a downward consolidation move for all indices.

As for tomorrow, if things get ugly over night in Saudi Arabia, then a drop to lower channel line around SPX 1277 is very likely.  Otherwise, there is a good chance we see a relief rally to back test SPX 50 D-SMA around 1300.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.