I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Wednesday, June 30, 2010

Real

There is a lot of talk / speculation about a bounce here. "Everybody is bearish, including CNBC. The market loves to fake people out. Since a breakdown is expected, there is no way it will do that".

Quite frankly, I hear a lot more talk like that above instead of people calling for the breakdown. I think people are trying to get too cute calling everybody else a contrarian indicator.

I think the simple fact is: this move is real.

We have acceleration down, increased breadth down, increased volume, increased distribution. For crying out loud the daily indicators aren't even oversold yet!!!. I think the macro and fundamental situation is deteriorating precipitously, and I think for the first time in the last year and a half the macro and the technicals are finally coming back together (and I think this is a very bearish combination).

I don't know the future, you don't know the future. I think you are a contrarian indicator, you think I am a contrarian indicator. But I think odds and the risk/reward (and that's all I can play) favors a mini-crash here. I have no interest in getting cute with this wave a trying to time a bottom. I think we have a few weeks of some pretty sharp selling off ahead of us.

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