Was that the correction?

My beloved readers (both of you lol) I think we can pretty much say the trend is down, until proven otherwise.

We are on the verge of what can be a 3rd of a 3rd wave down. If you don't know what a 3rd of a 3rd wave down is, it is the most powerful place of a certain degree of trend. In this case, what I thought it could be the start of a bigger bounce on Friday may as well be all that is of the bounce. That's why the main purpose is to grab the tops and not finding the bottoms right now, because waves can always extend and rallies be very brief.

Today it marked the largest downside Advance/Decline ratio. If this were to be a 5th wave, we shouldn't have a bigger number than the one we had seen last week, but we did, hence adding more support to the 3rd of the 3rd scenario right now.

As I said a couple weeks ago, a trip to 1000-1013 points would be in the cards in a very fast manner in case of a 3rd wave, and it seems that's what may be in the cards.

The US Dollar remains the same. It's been overbought for weeks now, but I've been warning also for weeks, that the trend was up so buying every dip was the best bet and our focus was to find bottoms not tops since it could always extend and we didn't want to miss the ride up.

Do not forget when we are at a larger degree of trend, as it is the case now for USD clearly, in an uptrend surprises always happen to the upside and corrections may be very shallow and brief. That's what happened in 2008 and what appears to be happening now. We already surpassed the 80 pts in the index, and at this pace we may well reach the 90 points in a few months. That would put EURUSD at or below 1.25.

So let's keep an eye on it, and if we do get a bounce, in my opinion will be a gift of gods and I will surely be shorting it, but the market has it's tricks and as we know it likes to issue the least possible tickets for the ride - and a lot of bears would be missing the boat since most or many bears enter on short positions at bounces or retraces...

Me ? I don't care, I'm mostly a breakout kind of guys, if it shows weakness we should short since we can never know how big of a retracement it could happen or if it happens at all... food for thought everybody.

I am sorry for the lack of graphs on today's post. I will surely compensate by tomorrow with a more thorough post.

Portugalmination 2.0

The day finished at -5% here in Portugal and -6% at our neighbours Spain. Financial markets now have Portugal on the spot light due to their lack of a plan to cut the deficit which was presented to be 9,6%.

Adding the lack of competitiveness and no will to cut the government expenses of course it puts everyone nervous. When the Financial Minister came to the newspapers and saying "Poor us, now we fall pray to those damn speculators..." Sure ma man...if only we had a good economy and public finances... investors are not stupid. They see risk in Portuguese debt and that's why their fleeing to other lands and demanding a lot more yield... Don't make investors or rating agencies the expiatory goats in this matter...

As for S&P, nothing new that we haven't been following the past weeks. I could say I'm on fire...but I won't, that would be to conceded of me ( Uoopsss!! ).

This is what today felt like:

Red across all the board pretty much. And be prepared to expect a bit more of this... I think as I said a couple days ago, 1000-1013 pts might be the only stopping point now, before any meaningful bounce.

For one, I'll be awaiting tomorrow's portuguese stock market to open... will it be another blood day or will it be a hope day?

Note: Don't forget Free Week is being offered by EWI, with their paid subscriptions that are accessible free until Feb 11th, so take advantage of it ;)

Portugalmination...

It seems the financial news today are all about my little country... Too bad that the reason for the spotlight to be on us is not for the best reasons, I wish they were... It seems we are now following the footsteps of Greece, and I feel sadness for my country but I have to admit our government sucks really really bad...

Yesterday morning I warned the rollover was imminent in yesterday's post:

http://www.mybullmarket.org/2010/02/bounce-is-on.html

If indeed the indexes are in the wave Î think they are, as I said last week, this decline should be stronger than the last 15 days of January. So be ready...

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As for the markets, today was a very dull day with not much going on. The S&P as per last post is bumping to the lower range of the Target Box. Anywhere from 1100-1120 have very good odds of being turning points for this upward correction.