Thursday, May 20, 2010


We're in crash mode here. I'd expect a bounce on Friday because of the oversold condition, end of week shortcovering and option expiration. Other than that, I doubt the markets can generate a turn before late Monday or Tuesday.

Added @10:00 PM: While things look very scarey at the moment I suspect that the current declining phase is about over. The MCO is so oversold that we could see a strong rally tomorrow but this may depend more on the option market than anything else.
We can be sure that across the waters, bankers and politicians will be working over the weekend to find the right shade of lipstick. The markets are setup for a crash or a rally, I suspect they want the latter.

I've now added someother technical indicators for historical reference.

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