The markets ability to follow the patterns we have mentioned over the last few days lends some confidence to the outlook we have been seeing.
If we are to remain in this stage of price action, then Tuesday should bring early strength into the 1407-1408 SPX level followed quite quickly by weakness and a full blown continuation of the correction we have seen.
I do not have my seasonal notebook with me so for short term traders I cannot give specifics other than early strength followed by fairly strong weakness, so if you still have your call options try and take your profits in the first half hour of the day. I will give the more specific seasonal pattern once I have a look at my notebook.
Intermediate and Long Term traders are holding fast with a light 45% allocation to equities until the dust settles and we have a better idea about whether or not the worst is behind us or the next leg down (which could be a killer) is right around the corner.
The small investor continues their ways of bullish persuasion with the non stop call buying routine.
From an intermediate term perspective this is a very bearish precursor to lower prices and should be decline in value as I see over the next couple of weeks and not see the small investor shed themselves of these call buying ways, then the road could get very bumpy before it gets better.
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