Wednesday, September 10, 2008

09.10.08 - Positive Prices on Negative Tick

Effectively a flat to positive market as the Financials continue to struggle to find their footing. Amazing directional volatility during the past several weeks. In a sense, today is welcome relief.

Downside Risk: Yesterday my brother asked me what I felt the downside risk is as we head into the fall. Complete "gut" feel based on some crude technical eyeballing is SPX 1,150 to 1,175. We hit about 1,200 in mid-July as a reference point [edit: had one too many zeroes on those!]. I'm not much on time projections, but if indicators continue on their current trajectories, lower lows would be registered through mid-to late September. More on this later. I have no fundamental basis to believe this has to or should occur -- call it internalized pattern recognition. It is not a market call per se; again, downside risk guesstimation.

I'll be looking to exit that swing trade [discussed yesterday] - nice day. Normally I'd hold longer, but prefer to take profits quickly in this market.

Apparently I wasn't alone in that thought! Testing VWAP, should hold.


Anonymous said...

Using SWAG, a variation of the "internatlized pattern recognition" method,I think that you're pessimistic - look for the SPX to be in the 1200-1250 range coming out of the fall.

Jeff Pietsch CFA, Esq said...

Yes Anon - ye old SWAG. You expect us to end up about where we are at. My expectation is actually a bit more positive than that. My post was in response to what the downside may be should we go there based on support levels further below. Best, J