"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
Sun Tzu

Thursday, February 21, 2013

US Stocks: Airpocket Ahead!

Technically, stocks are at risk to hit a major air pocket below and we could see stocks decline around three percent very quickly. Again, this is just based on technicals and there are three different ways to evaluate the situation: first major Fibonacci retracement (blue) is around 1480, which is roughly the last major breakout level (red). This will be another strong support level. Finally, the intermediate-term uptrend (green) does not get violated until 1480 as well. Until then, there is not much to hold up stocks:

Aipocket: no major support above 1480