Here is a chart of SPY.
Behavior of stocks continue to mimic the price pattern of SPY. I can tell you that breaking down from the red trend line does not necessary mean that we are going to get a big sell off...unless some major events happen. You can take this blog entry as a reference for the key levels for any breakdowns.
The only hope for any rally is for other major currencies to bounce....so that commodities can rally as well. Just IMO.
QQQQ is another interesting story, October is usually a good month for NASDAQ to rally. But...hey...we are in bad times!
QQQQ is our last hope for any major moves, again I expect a rally if major currencies rebound.
Guess what, QQQQ is also a good candidate for a breakdown. I believe there is still some room for these component stocks to go down due to some major events. In the meantime, if non of the above happens, expect some sideways trading for a while.
The key event that I have been betting on is the fall of crude oil prices, but I think I chose the wrong instrument to bet on. Oil Services and Producers has been deeply oversold and I do not expect the fall of its component stocks to be as big as several weeks ago. If you want the most direct correlation between crude oil, go for DTO...but don't expect much returns for more buck.
But I do not write out a big move for Oil Services soon....we still have EIA report and a bounce of EURO to count on.
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