We’re set to gap down on geopolitical concerns in Taiwan and the Middle East. Taiwan’s market got slammed to limit down (7%) within minutes of opening due to the controversy around their recent elections and the allegedly staged assassination attempt. I have to admit that this combined with what happened in Spain is bringing up bad memories for me of our last presidential election. That whole recount period just sucked the life out of the market. I hope we don’t end up going through that again.
Anyway, this gap down has me rethinking my plans to jump on those shorts on my list. It’s very likely that most of them will trigger immediately at the open. In my experience it’s usually a bad idea to chase such gaps, especially not when the market’s been moving in the direction of the gap for an extended period of time. The nearby Nasdaq 200-day moving average may also bring out buyers. So as I usually do on gaps, I’ll be waiting until 10:00 or 10:30 to make any moves. I think it’s very likely that this gap may flush out the last of those sellers I talked about in the last post.
Was hoping we might get one of those hard selloffs followed by a big rally late, but nothing doing so far.
Anybody think earnings season will save us, or send us down further?
Gary’s comments say a LOT to me because peeps like him should have cleared the decks of longs once things started breaking below the 50DMA. Very interesting anecdote! Explains why this sell-off has been so slow, grinding, and tortuous. Even the pro technicians are being stubborn!
I can’t say what earnings season will bring. It all depends on what’s said and, more importantly, how the market reacts to what’s said.