I won’t be posting any charts today but I’ll sum up what I’m expecting tomorrow. It appears that we may be going bullish fairly soon in the S&P500. This index is sitting at support but is oversold. It is also forming a falling wedge with a bullish divergence on the MACD. The S&P is the strongest of the bunch, but as I’ve been saying we are still in a bear market so it doesn’t make much sense to pump your portfolio with longs heading into tomorrow. As far as technicals are concerned, we are more bullish than expected so be prepared to get stopped out of your shorts. We could head in either direction tomorrow so expect the unexpected as we head into the Fed meeting. We got a lot of volatility today and tomorrow should be no different. A no cut has been priced in already but the market remains very vulnerable, be suspicious of any strength because this market still seems to want to go lower. The big picture is lower, but an oversold bounce should be expected.

June 26, 2008 update:

The S&P500 was forming a falling wedge (bullish formation) on the weekly and daily charts but this formation failed today as oil jumped above $140.

The short-term charts were indicating a move up but the monthly chart still illustrated a downtrend. We are now heading towards the March lows…we will most likely move sideways from there but further downside in August wouldn’t surprise me one bit. Start looking into those ProShares to gain from further panic selling.

Richard
richard[at]hedgeagainstspeculation.com