Joined: 15 Apr 2010
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Wed Aug 03, 2011 3:54 pm Reply with quote
Today the markets were crushed again, the SPDR S&P 500 ETF (NYSE:SPY) falling from a close yesterday of $125.49 to $123.53. This epic fall came on the back of continued worry about Italy, Spain and fear of a new possible deep recession in the United States. Volume was huge on the flush that took the markets into the 10:30am ET time frame. Then, all of a sudden things turned. As if the Plunge Protection Team came out to join the party and prop things up, the markets erased a majority of the steep losses. With volume continuing to be this high, it may be a sign of short term capitulation and depending where the markets close, maybe a bottoming tail. A bottoming tail is a reversal signal as well.
Gold and silver are surging today with the SPDR Gold Trust (ETF) (NYSE:GLD) trading at $162.47, +0.95 (+0.59%) and the iShares Silver Trust (ETF) (NYSE:SLV) trading at $40.61, +0.79 (+1.98%). Oil is taking a hit today, the United States Oil Fund LP (ETF) (NYSE:USO) is trading at $35.98, -0.42 (-1.15%).
The key to determining where this market is headed in the next few days will depend on where the markets close today. The volume is signaling capitulation which is the height of fear. Generally, this is a bottom signal. The next step is to watch where the markets close. If a bottoming tail does appear, an up move in the markets over the next few days should follow.