Trader’s today were watching to see if SPY would take out last week’s low. While that’s a good thing to look for, it’s not a requirement to declare the SPY done because the “Three-Fan Rule” has been broken with today’s close. I wrote about this a few days ago. Try it yourself; draw three trend-lines on the SPY chart starting at the March low and see if SPY didn’t close below the third line today.
The QQQQ and IWM are still holding on technically, but a market that can’t rally with oil crashing has some serious problems. Yes, bonds sucked some money out of the market today, but it used to be that you could count on oil money rotating into financials like clockwork. But today, the financials were down big instead of having a giant oil-fueled rally.
This market’s only hope is for a fine, jobs-created souffle for breakfast Friday morning, cooked up by the chefs over at the BLS. While the jobs number is a political statement rather than an economic report, traders like to gamble on it in the stock market. But then again, the last report was so widely ridiculed that maybe, just maybe, it’s authority, and long-term market relavence, will be reduced this time.
Postion: Way short and printing money – QID, TWM, SDS, SKF, SPY puts.