The sp500 today is playing a game I am quite familiar with. It gaps down and then appears to start a northward rally. Then all those who were talking about the flag pattern failing and saying the decline is over.
The market is being DECEPTIVE. It is trying to suck in some more fish and then take them out to the woodshed later this week.
If we are going to get a stock market crash, it does not have to occur today. A stock market crash can be a series of 10 1% down days in a row and THEN on the 11th day a 18% down day. That is the most deceptive type of crash because the market declines in very small increments on a moderate slope and then finally gives up at the very END.
Unfortunately that type of price action is tough to understand. It is similar to the old ‘frog in warm to boiling water’ syndrome. The frog does not jump out until the last minute and then it is usually too late.
In early August 2011 we saw the market go repeatedly down day after day and the persistent number of declining days was starting to break records.
So do not be deceived when this market trickles down for 5 days in a row with each day only 1.5% down.