Negative financial news from the middle east put a damper on stock prices worldwide last week. This was the impetus needed to weaken the US markets in order to complete the bottoming process we are observing. While the Dubai news rattled US investors, US banks apparently do not have much exposure to Dubai debt and the market weakness in all sectors seems more of a cash raising action than anything else.
The McClellan Oscillator is continuing its correction and suggests that we could easily see a few more days of weakness without signaling anything more negative that what I have previously suggested. In the chart below I've drawn in the measure for a head and shoulders reversal pattern and the initial price SPX targets.
The McClellan Oscillator for the week ending 11/27/09.
Click to enlarge.Added midday 11/30/09
SPX 65 minute chart at midday 11/30/09
There should be a cycle low about noon tomorrow 12/1.
Click to enlarge.
1 comment:
Much exposure is the problem, you banks are not the issue
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