The NDX daily chart moves within this marked descending channel pattern will likely make a SEQ 13 today (that's a yellow alert) but still needs to complete the Combo currently at 11. In order to do so, the market should make new lows. We start to run in support though, as around yesterday's low starts the Bollinger band support and we reached the minimum target of 1200. The SPX is counting an 11 and needs at least one day more to complete the counts and should thereby test the triangle support at 860. The point is that many indicators are not oversold - the Rydex around .90 rather signals selling pressure ahead. Option ratio's are not particularly signaling a buy - on the contrary, many are looking for the market to go up as on a daily basis as the 'pundits' claim this market is cheap. Yesterday Blackrock made the famous call that the recession was priced in (complete b.....), they did that a few times on the way down - just speaking their book. Funds want the market to go up desperately, as it stays low the risk that more redemptions will come rises. They will try to manipulate it up as they see a chance to do so, but we should be aware that the market has also 'priced in' never seen multi trillion dollar bailout packages and the most aggressive rate cut campaign worldwide, as the next rate cuts are a given fact. The only thing not priced in, in my opinion, is the magnitude of the disaster the derivatives will have over time. We will see the effect being priced in. All of the bigger recessions had always as a consequence the PE evaluation in the 5-8 range and we are talking real earnings, not the fantasy earnings still being hold up to fool the investors. Goldman was the first to admit that earnings need steep corrections and lowered them for the SPX to 65 this year and 68 next year. Multiply that with 8 and you have an idea where the SPX is heading.
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