MARKET COMMENTARY (2-16-09)

I am back from taking a full week long break. I think all the negative news was starting to get to me. When you wake up in the morning and read the WSJ and IBD, you mostly find bad news. When you turn on CNBC, you find more bad news. Finally, while reading your favorite blogs, you come across even more bad news. I had to stop that news flow for a few days and just get away from it all. I am back this week to resume my regular trading activities.

Take a look at the SPX and COMP below:


We are in long-term symmetrical triangles. What the market is figuring out right now is whether it wants to go up 20%+ or down 20%+. Ultimately, I do believe we head lower, but not before some major whipsaw to flush out more traders. In the short-term, you can see that the market is forming a multi-week flag. On the SPX, it is between 800-870. On the COMP, it is between 1430-1600. I don't even bother using the DJIA anymore as it is skewed quite a bit.

One important thing to note is the 50-day MA. Currently, the SPX is trading below it while the COMP is churning above and below it. Both are technically extremely bearish. Take a look at the REITs as the vast majority of them are either breaking down or setting up for a break down. This is in addition to my favorite sector (financials).

In other news, something like this really scares the shit out of you.

Enjoy your break today.

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