Until we get over 915 I would not be bullish. The daily chart of the SPX pictured above is showing a very bearish descending triangle forming with support near the 830-840 area. Bottom line is we are very close to breaking this pattern to the downside. I think if we see any attempt at a rally up to the 900 level is a great chance to go short. I do NOT think we have seen max pain yet. Thursdays rally should be thrown out the window as of today and if we cannot bounce with volume these next few days I will begin to anticipate a very big selloff that could drop us a quick 1000 points in the Dow and perhaps as low as 690-700 in the SPX. I am not calling for a crash but only saying the probability of us going lower and making new lows by months end has gone up considerably since last week.
There is simply no leadership and the banks looks terrible. Oil looks like it wants to break 50 and the tech stocks just should not be touched. I like very few sectors to the upside. Looking at the triangle its possible we can see a weak runup to that downward trendline but if we do you should be selling into it because I think new lows are coming. I was hoping these levels would hold and we could begin to form a base but hope is not a strategy and I gotta call it like I see it. The problem is I see too many others "hoping" the same thing. And that has ALWAYS been a great contrarian signal in the markets. Bottom line do not get caught being long in this market and especially without stops in place. Any rally should be sold into this week until we get some more clarity in the charts. Right now I know we are oversold but we may be more oversold by friday so DO NOT FALL IN LOVE WITH THE UPSIDE.