The Phaserl


Time to Fade the Raging Bull

by Rick Ackerman, Rick

Although our technically derived target for the Dow is still a very bullish 16800, we wrote here recently that we were keeping one foot out the fire escape. Given yesterday’s display of bravado on Wall Street, however, we’ve now put the other foot out as well. After being down 116 points, the Industrial Average rallied nearly 200 points to end the day 80 points higher, at 15040. We had anticipated the initial weakness with a bearish forecast for Thursday of a 15-point drop in the E-Mini S&P futures. This equates to a Dow fall of about 120 points. At the lows, which occurred midway through the session, both came close to hitting their respective targets. Although the rebound therefore came as no surprise, the relentlessness of it did. After bottoming, the broad averages ratcheted steadily higher for the remainder of the session, strongly suggesting with each new upthrust and shallow pullback that the rally was being driven solely by short covering.

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1 comment to Time to Fade the Raging Bull

  • Frank Zak

    The PE ratios of stocks are rediculous.
    And this is the bad time of year.

    SP pattern just made a triple top with
    a right shoulder. But it is still in its channel.

    If stocks drop at slow rate this would not be good
    for metals.

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