Wednesday, March 5, 2008
In my January 23rd post, Charts for the Big Bounce I put up a number of indices, S&P500, Eurostoxx 50, DAX, Shanghai Composite and the Nikkei. The bounce did indeed occur and it was ‘big’… relatively speaking. The move higher lasted for several days and resulted in several failed attempts to break out. Volume on up days was anemic to say the least. Buying power came from shorts covering, rather than from longs establishing new positions.
The bounce is now over. A test of the lows is now likely. I do not expect the lows to hold. The Yen has decisively moved higher, signaling continued risk aversion.
Non-Farm Payrolls on Friday could be the catalyst for a catastrophic move down through the lows.
Posted by Ben Bittrolff at 8:37 AM