August 8-12, 2011

Monday my daily CCT registered 112 instances of -1000 Tick, which is a new all-time record. 500 S&P stocks were minus and all 30 Dow stocks were minus at some time during the day. This could be the opportunity to witness a major market bottom this week. A -1667 tick was registered, which is the 98th percentile of excessive minus. As of Monday, the last three trading days have had panic selling: a.k.a. 262 independent instances of -1000 Ticks, the most since the crash of 1987. Tuesday’s FOMC announcement was made creating a sharp decline immediately following for about 30 minutes. Then we saw some stability. The severity of the oversold should generate 150 S&P points from the lows of 1077. The bonds were able to rally following the announcement. Wednesday’s lows presented a higher low than the previous 1077 without harsh minus tick. This market is still fragile and that takes time to heal, but the blows to the head of the bull are not being administered with the same lethal vengeance as we saw on Monday. The bonds were able to spike above 138, shortly after the 1:00, 10-yr bond auction. Institutions feel they have no place to invest other than treasuries.  This type of fervor is very similar to the dotcom situation of the first quarter of 2000. The bulls won Thursday’s battle. We experienced 84 plus 1000 ticks, registering tremendously high on the daily CCT. A close above 1200 would place the week in a positive. The 30-Year Bond auction went exceptionally bad, with a lack of bidders. There will be some reality that will start to replace euphoria in these U.S. Treasury prices. Technically, a close below 134, then a close below 130, would turn the chart pattern decidedly down. This week has been a roller coaster ride, with sharp rallies, and sharp declines, but no continuity.