Technically speaking:

Looks like the indexes made a double bottom base in June, and a breakout in July, however, when we look deeply, yellow card is flashed:

1. On weekly chart, divergences occured in MACD, RSI, stochastic
2. Seasonally, sell in May and go away, though it delayed for one month, in summer, markets do not support for big breakout and new trend
3. In late stage of bull, bull is too obvious, 1000 points rise in Dow in one month
4. Goldman sachs is the main player in this bull run, Bernake and Paulson are from GS, the chart of GS is awful
5. Bond market is smarter than stock market, and bond market leads stock market, there was a crush in bond in June, check symbol TLT, bond king Bill Cross turned bearish, we can sense there is danger in stock market around the cornor.
6. The volume of yesterday's sell off is about historical high

we can list more ......in the yellow card, when we had a big drop like yesterday, red card is raised, get out, we might see dead cat rebound, that is not our problem. Whenever there is crush, do not wait until rebound.

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• Thanks for the comments. -凌空长老- ♂ (0 bytes) () 07/27/2007 postreply 13:37:27