Friday, August 5, 2011

S&P 500 ~ Pre-Market Warm-Up ~ 5 August 2011

After yesterday's big decline it's very difficult to say whether we'll see a bounce today. I agree that everything is oversold but in 2008 everything was oversold too and the market kept going down...

The SPX will open with a big gap up and we have to watch whether we'll close the gap or go higher.

If we close the gap we might see panic again and plunge to 1180. If the market starts to rally though we might see some short covering which might lead to 1235 or even towards 1260ish. It's pretty much fifty-fifty at the moment, so let's first see what the market has in mind.