Securities Research Services

Wednesday, January 16, 2008

Continuation Pattern Emerges

Index prices broke down on heavy volume from diamond continuation patterns yesterday. This indicates that a fresh wave of selling will follow.

The bottom in this market is a long way off still, though we are sure to get a tradable bounce at some point. The Volatility Index (VIX), which is used to measure fear, barely ticked forward yesterday so there is a lot of room for the market to move lower before true market-reversing panic sets in.

It appears that investors are waiting for a Fed bounce before releasing their shares. We suspect that they may end up releasing them in a panic a few days from now instead.

Japanese markets, which have been great indicators for projecting the US markets lately, were crushed once again in today's trading.

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