Failed Bailout means test of December 1st lows.
Futures aren't taking kindly to the failed bailout of the US auto industry. What this means for today is a probable test of the low created by post-Thanksgiving/Monday selloff. For the S&P we are talking around the 820 mark:
One can see from the TICK that short positions are favoured. But the significant bullish divergence in the number of stocks making new lows favours a more meaningful rally similar to that of this summer (where the prior reaction high got knocked out - even if in the end the S&P continued to tumble). The best case scenario here would be a rally all the way back to declining resistance in the 1,200-1,300 range.
It will take baby steps first; look for retest of 820 than rally to 1,000 before a another run at 850 before the final push to and beyond 1,000. I would give this a time scale of 2-6 months.
Lets watch and see what happens...
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
One can see from the TICK that short positions are favoured. But the significant bullish divergence in the number of stocks making new lows favours a more meaningful rally similar to that of this summer (where the prior reaction high got knocked out - even if in the end the S&P continued to tumble). The best case scenario here would be a rally all the way back to declining resistance in the 1,200-1,300 range.
It will take baby steps first; look for retest of 820 than rally to 1,000 before a another run at 850 before the final push to and beyond 1,000. I would give this a time scale of 2-6 months.
Lets watch and see what happens...
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
