Stock Market Analysis

Sunday, January 10, 2016

More Downside This Week?

What a week it has been for the first week of January last week!

As if running on a precision clockwork, the US market took a dive on the China slump and the oil glut right from the first day of 2016 in what I have always expected to be the market crash year. Me and my Master's Stock Options Picks Subscribers are also sitting on some nice profits right now. In fact, the market continued to sell off last Friday even though jobs report turned out way better than expected just like how I said it would last Thursday. Yes, a market is truly bearish when such good news is used merely as a means of bailing out of the market rather than buying into it. As the old saying goes, how January ends, so will the year. It may not have been true all the time but it may just be the case this year.

Its the second full week of January but also January options expiration week. Apart from that, the second week of each month is typically a quiet week after the mega economic releases of the first week. Without any major economic releases, week two is typically digestion week. A week of technical driven trading in response to whatever happened in the first week. Tomorrow would most likely see those people who bought into the jobs report early Friday morning bail out today, continuing the downtrend. This is supported by the double overlapping bearish candle that was formed on the ETFs of the 3 major indices. This is usually a very strong short term bearish continuation pattern which basically showed that the bears are still in charge after a failed attempt by the bulls. However, since the market has been down this much so far with the QQQ already making its 7th consecutive negative close last Friday, it won't be surprising to see a bit of an accumulation over the next few days. Maybe just for a day or two. Whatever it is, the bearish framework is strongly in place and so I would take any positive days as bull traps or dead cat bounces.

Market Crash Timer: RED

For now, the market remains in short term and intermediate bear trend within a primary neutral trend.


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