Financials pull down the market

7/28/08

"The IMF(International Monetary Fund) stated no end in sight for the housing crisis causing another hit to financial shares which led the markets on a steep decline. " This is one of the financial website headline describe today's market recap. I am laughing loud for that misleading statement. I guess even a 11 years old child know what was going on about US economy. It is because they all cannot go to extra activities that they usually could do. For example, music schools, painting learning, dancing schools, and karate...etc. It is because their parents are suffering and deeply cutting down their budget to cope with reality. The reason I wanna point out here is market down significant today not because of IMF saying. It is natural technical pullback that I(and other market technicians) already knew since last thursday. It is the CHART telling me what would happen as of today's decline. It is the market breadth that I can see it before and the chance in my favor that market need a pullback before it goes up higher. It is just simple as that.
Recently, I have been posting more charts to let people see what I see. Of course, it needs more time and skills to understand what is the real meaning of the charts that I posted. But I simply making little words to describe what will be going on. It all involves certain condition. Tomorrow, I am expecting market would reverse as I see the S&P is in the reversal zone. But, not until I see there more evidence to see the market turnaround, the market has chance to retest the 7/15 lows since all major indexes are closed at lows of the day. There have GDP as well as non-farm payroll data for this busy economic news week.