It is tempting to want to jump in here and buy this decline as we hit some key support levels. However, I don't see any convincing signs that would suggest an imminent reversal is in the cards. There was huge volume in the last two days, but I don't see it as the capitulation variety just yet.
I expected to see 1180 (ES) back in March following the quake in Japan, but the market managed to rally a little earlier than I anticipated. Now it seems the 1180 target will be hit. Also looking at 1150 as a lower potential target.
There will be plenty of short-term bounce opportunities, but the current overall market sentiment remains weak. In the bigger picture, I continue to expect lower lows. The question is, how low is low enough before the Fed steps in and announces the next round of stimulus. I am cautious amidst the current volatility. I will post when I see (what I consider) a high-odds-for-success long opportunity.
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