Friday, February 20, 2009

02.20.09 - Another (Large) Gap Lower

From last night's ETF Rewind beta commentary:

"Today marks one of the highest oversold readings across multiple time frames we've marked since starting publication last November. That said, once again we have mixed [mechanical] signals and market normalcy is officially negative within a confirmed down trending market. With options expiration tomorrow here at the bottom of the channel, I have a sense we could break either way hard for either a short relief rally, or a move into a significantly lower range. Caution is the word of the day."

Well... So far the SPY S2 floor pivot has held twice and we are retesting right now (about $76.50), in fact... looks like its breaking down [history, it broke]. Cumulative Tick is extremely negative and the A-D line is flattened. Even the small bounces we saw earlier had little energy behind them. Although a supportive volume spike appears to be forming just now and the VIX is holding 50, "caution" is indeed the word of the day.

Reading: BZB Trader on ETF Rewind

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