Saturday, July 17, 2010
I warned in an earlier blog that I thought that The "Wolf Pack" would be back by mid summer and start feeding again. The last time we took the S&P 500 down to the support level of 1040 and held I was looking for a bounce off that near term bottom and then thought we would go down again and perhaps break though the 1040 level on it's way to 950 to 975.
I was hopeful that the rally would take us to the 1110 level on the S&P 500 which would have meant that at that level the 950 to 975 level could be the low for the year. However we did not reach the 1110 level before we started down, at least not yet, which tells me that we could go 100 points lower than the 950 to 975 to about 850 to 875.
This week will be important because we closed near the low for the day on Friday, down 31 points off the S&P 500; almost 3% for the day. If we don't make a run at 1110 next week or so then it is only a matter of time until we break the previous low of 1022 and head below 1000. The big question in my mind is will the "Wolf Pack" be satisfied at 950 or 850 level.