Thursday, 10 November 2011

I Am Bearish Take 2

In my last post I talked about a number of bearish setups forming across markets. After recent price action, I have even more conviction that we are on the cusp of a major breakdown. The recent rally has failed spectacularly despite huge pledged government intervention. There are cracks appearing everywhere. Really it is all down to the ECB now and the only solution I see is if they pledge to cap the yields on these sovereign bonds. Otherwise, this market could really get out of control.

S&P500 Daily:
A double failure out of the 200 Day moving average. Yesterdays closing candle was ugly indeed. These reversal candles are indicative of a climatic turning point! A break of 1200 in coming days would seal the fate. Also note that we have had a confirmed Dow Theory Primary trend change indicating the transition from Bull Market to Bear market. I will show this another time.

S&P500 2008
I keep referring to the 2007/2008 parallel. Back then the market topped out right on the 200 day moving average. We then retested the previous breakout zone and once support went, the real collapse began. Look and feel kinda similar?

S&P S&P 500 15mins:
We have a possible Head and Shoulders pattern forming in the short term. Any break of this trendline overnight will lead to a move down into 1205/1200 at a minimum

DAX Daily:
A classic failed breakout. We had a great base pattern that formed below 6000 and the subsequent breakout failed spectacularly on the 50% Fib retrace. This does not bode well

DAX 60mins:
Another clear short term topping pattern in place. Look for breakdowns of this support.

Bearish reversal out of the 61.8 and the 200day moving average. It doesn't get much better and clearer than this. This is the barometer of risk/carry trade.

If this plays out, Asia is going down. I thought that this rally would take a lot longer to play out down here but we may not have this luxury. I will not hang around to find out either.