Citi technical outlook - heading for 5 - market update

My favorite short is now facing the inevitable - actually it's too big to fail but it was the first on my list to go bust - which it will not as long as the US government has credibility. We are now in week 11 and broke to weeks age below the support line. Usually the price pattern requires 10 dollar down matching 0 but Citi has to survive, otherwise Armageddon starts right away. We have a substantial drop below the weekly Bollingers so at some point we will see a substantial pull back but the trough needs the 13 count to be complete and we could easily see 5 as a low.

Markets are now entering capitulation mode again with volume rising and we will make new lows heading in case of the SPX for the 770-800 area - it's only a matter of time (days) - but we will have a bounce soon of substance, as we are far below the monthly Bollinger and, as soon as we have tested the 2002 lows, we can even see a substantial bounce. More as we get there.