Gold

Gold has yet to really move into an aggressive breakout posture vs other currencies. However, it is trading over its 50 day average on most currencies after Fridays strong performance. One can also see it is an an area of strong support vs the stock market. I may try a long position here and see how it works out. If gold starts to gain vs. other currencies one can get more aggressive. Nonetheless... Friday was strong.

VIX

The VIX has popped more on this sell off as well, getting over its 50 day Boll Band. However, it is at a point that has proven to be resistance in the past. We are also over sold on the McClellan Osc. and as a % vs. the 5 day average. Thus, I would not be surprised to see some sort of pop here. The real question will be: what happens if the VIX trades back within its Boll Band, as this is a well known bull signal. The quality and extent of the next rally will give us good information on this market. Also, many E Wavers think we are in the 3rd of a third (within the big 1st wave) down... so will we just keep going? If we do, it certainly would verify their count.

The Damage Done (cont)

Notice the previous swing lows have been taken out on these sectors.

The Damage Done

There are a lot of charts to post so bear with the multiple posts please.

One can see that this sell off IS different from the other two from the March lows; it has done more damage to market internals.

Closing Comments

The big story is the sell off in the high yield ETFs. The credit markets have been holding up....but not today. Look at the volume! If you look at Staples vs SPX, the turn looks legitimate, and looks like it has further to run.

Auto Sales

Calculated Risk always does good work. Thanks for the charts.

Who could have imagined that Cash for Clunkers would just pull forward some demand? Geesh! Surprise, surprise!! Back at 1983 levels. Nice.

Its all government demand everywhere people... they are the ONLY game in town.

Quickly

Now that's more like it... I have declining volume over advancing volume by 23 to 1. Brutal day for the bulls. Lets see what this leads to... more to follow.