While you seem compelled to buy tomorrow, here are a few things you may want to consider:
a. The BKX will have a triple bottom at 46.52. Triple bottoms don't exist in the wild or captivity. They are a mirage. The BKX will likely continue to drop until it hits the 1996 shelf at 40.
b. 2002-2003 lows We are so close to the 2002 lows on the SPX we will likely tag them. The 768-789 area is likely in play if we blow through the 844 area, which it appears we will do.
c. Capital Gains Freak Outs Folks are being told by their financial advisors (in other words, their sanitation workers, meter readers, taxi drivers) to sell their equities to beat a possible capital gains increase by the new administration. Of course, you'd likely have to have held stock since before Al Gore invented the internet to have any gains to speak of. In the case of GM, you'd have to be Warren Buffett's dad and bought in 1941 to have any capital gains.
d. Margin calls, Hedge Fund Redemptions New lows on many large caps and hedge fund selling may continue to weigh on the market.
e. 1-month T-Bill rates are at 0.10%, indicating strong fear.
f. The NYA may have very little support between here and the 4400 level
g. The Dow daily triangle breakdown measures to 6600 Dow
h. Finally - Max Pain may be impossible to achieve this expiration, so we would go the reverse direction - down, if that cannot happen.
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