Monday, January 25, 2010

Tactical Market Timing as of Close of Friday, January 22, 2010

Tactical Market Timing as of Close of Friday, January 22, 2010SocialTwist Tell-a-Friend
Fari Hamzei
We went thru a tumultuous week of corporate earnings, political, financial and geopolitical surprises, some with dire unintended consequences. 

Those of you who attended my last market timing webinar held on Monday January 18th(http://hamzeianalytics.com/Educational_Webinars.asp), should remember my dire warnings.  Our charts had a series of bearish divergence setups.  Brad Sullivan's comments were also spot on.  Now let's go thru our proprietary charts:

Our Timer Chart shows a shallow rise, and not a hard spike, in Down to Up Volume Ratio.  This is a mood change IMHO.  SPX was at MR1 Level (Monthly Resistance One) on Friday OX (Jan 15).  Last three trading sessions, nastiest since prior March 9th lows, while producing a slightly higher volumes, pushed SPX down to MS1 Level (Monthly Support One).  Our CI Indicator turned south sharply.  No index was spared. 



Vols spiked.  VXO hit +4 sigma.  The intensity is worse than late October sell-off, and yet the McClellan Oscillator readings are higher than October lows.  IMHO, the selling has just begun.  Mid-day Friday, I posted this on Twitter: http://www.twitlonger.com/show/4q85g




Percent of SPX components above their 200 day Mov Avg reversed hard, breaking their 20 and 50 MAs.  Notice the divergence with price around the 95% Level.  This is NOT good.



Our coveted SP1 Indicator broke its rising trendline as SPX went thru its -2 sigma band and its MoMo brethren reached a short-term oversold condition.



Bottom-Line:  We should be nearing a short-term oversold condition culminating in a dead-cat bounce.  Tape feels HEAVY.  What is next could be very nasty for our fragile jobless recovery.  Not sure PPT can do anything about this one. 

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