After yesterday’s rout in the equity markets I would much prefer a down opening, maybe something in the magnitude of what the S&P500 futures were down in the overnight session. As expected Asia was down, but other than the Hang Sang (-5.6%) most indices were down less than 2%. The DAX actually and oddly opened up and then spent the morning careening lower……It has since recovered down only 1.5% on the day.
It will be very hard for the market to get some legs today without first selling off…….But I would expect a sell-off to be bought as all eyes (desperate as they may be) are on the FOMC statement to be released around 2:15pm.
If the market can’t rally after a sell-off and the fed statement doesn’t help the cause then watch out below…..I know that is not too helpful, but at some point soon we will need to have a real capitulation, and at this point that probably will feel like a crash…..
We have to be very close to a near-term bottom, or at least a stabilization point. But I would argue that if QE2 failed then why shouldn’t the SPX be right back to where it was last Sept 1, 2010 when the index was at 1050??? maybe we have more room to go….I would guess we have another big down day and then reverse from the lows somewhere below 1100 and close up on the day and form a massive spike bottom that will be trade-able….there will probably be a move off of the lows of about 10%