Head Fake
Jeffrey deGraaf's ISI Technical Analysis Research:
"The breadth and volume flows yesterday (8/29/07) produced one of the lowest TRIN readings on record. The problem with any of the market's action over the last week has been in terms of volume. Light volume readings are notorious for giving false signals, and with it, we are relying on the weight of the evidence from a more extended time period. Credit spreads continue to widen, and as they do bulls around gold continue to grow. We find the gold bulls interesting, in that they are not being driven by the performance of gold (which has been unspectacular), but clearly by ancillary concerns within the world of finance. To see bulls or bears swell within a commodity without the commensurate move in the underlying basis is truly unusual.
We remain in the camp that this is a tactical bounce off of the lows in mid-August and we believe that initiating shorts into yesterday's strength is an appropriate strategy. Resistance of 1480 - 1500 on the SPX is an appropriate stop depending on one's tolerance for pain on the short-side up to those levels."
"The breadth and volume flows yesterday (8/29/07) produced one of the lowest TRIN readings on record. The problem with any of the market's action over the last week has been in terms of volume. Light volume readings are notorious for giving false signals, and with it, we are relying on the weight of the evidence from a more extended time period. Credit spreads continue to widen, and as they do bulls around gold continue to grow. We find the gold bulls interesting, in that they are not being driven by the performance of gold (which has been unspectacular), but clearly by ancillary concerns within the world of finance. To see bulls or bears swell within a commodity without the commensurate move in the underlying basis is truly unusual.
We remain in the camp that this is a tactical bounce off of the lows in mid-August and we believe that initiating shorts into yesterday's strength is an appropriate strategy. Resistance of 1480 - 1500 on the SPX is an appropriate stop depending on one's tolerance for pain on the short-side up to those levels."
posted by Never-Limp at 6:28 AM
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