The market was down sharply in the last 3 days and some rally is expected to relieve the oversold conditions.
Russell 2000 made a new low below August 24 lows yesterday and energy stocks continue to be weak.
It is very easy to manipulate DJI with only 30 stocks . Similarly it is easy to manipulate SPY where manipulating just 10 top stocks can move the market. Since this is the 5th step down, not all stocks will make new lows.
At the same time, some kind of capitulation is needed to start a decent rally. We do not think this rally will last and we should have new lows soon before the decent rally. We will not short the market and in the next decline we will take profits in our short positions.
Gold continues to consolidate.
Russell 2000 made a new low below August 24 lows yesterday and energy stocks continue to be weak.
It is very easy to manipulate DJI with only 30 stocks . Similarly it is easy to manipulate SPY where manipulating just 10 top stocks can move the market. Since this is the 5th step down, not all stocks will make new lows.
At the same time, some kind of capitulation is needed to start a decent rally. We do not think this rally will last and we should have new lows soon before the decent rally. We will not short the market and in the next decline we will take profits in our short positions.
Gold continues to consolidate.
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