And another day down – 9 out of 11. Vix upto 22, Put:Call ratio still firmly in bear camp territory..
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I had a couple of chats with various market participants and resignedness to the shakeout, forced selling and disgust were the prevailing sentiments relayed to me – to a contrarian trader, ones antannae are not twitching, they are positively shaking at this point. I’m beginning to wonder who is left to sell? It isn’t retail as they are out, it isn’t margin players are they’re flushed, it isn’t Directors who have (a) stopped selling en masse and (b) valuations are too compelling.
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I’ve been 25 pts wrong on the S&P and could be another 10 pts wrong here too, but the traders nose in me smells that a catalyst for a reactive rally is imminent. The first target is the 7 day exponential moving average – see chart below which shows it positioned at 1344. The MACD and RSI are probing territory where rallies have been commenced before too – note the similarity to last year end Dec period… Oh, and don’t forget, Facebook lists this Friday – the markets ‘bound’ to go up on that! 😉
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