SPDR S&P 500 (SPY)

[CaribbeanJim]

I'm expecting the weekly DJIA parabolic to break down here. The smart money is not going to add back in until a bottom is in... this should be a freefall. Anyone short anything is going to make money. The rest of this week is going to be U-G-L-Y. But the bottom could be in by the first week of August given the breadth and sentiment is already as low as it is.

As strange as it seems, the breadth of the Nasdaq has gotten hurt severely even though Relative Nasdaq:SP500 is strong. This leads me to believe the Nasdaq is priced way to high so I am expecting to see another 2-4% down move tomorrow. SP500 DEFINITELY has a few more days to go before I even think about the bottom being in.

The current set up should not turn into a full blown bear. The setup looks like it is going to take a swift 1-2 week blow and then we are back to the races. "Back to the races" will probably turn into a sucker's rally but it will be big enough to play intermediate-term.