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The Bear's Flag

Two of the three major market averages are indicating a 50/200 day EMA crossover.  The SPY has led the same crossover.  What does this mean?  The Bears are getting serious.  When the DJIA EMA's cross, the markets will be in a technical Bear market and values will make a push to find the low's again. 

I've been using the 105 mark in the SPY as a benchmark that signals a return to a Bear market and not just a Bull market correction.  The number of Put contracts at the 105 strike is huge and controls a significant part of the SPY's volume.  The Short Put writers will look to cover their positions by selling stock (going short on the stock) and the volume is not insignificant.

Today, slightly better than expected economic data from the Chicago PMI, Housing pricing, and Consumer Confidence energized the Bulls, but the energy gave way to a flat to mixed end of day result.  Gold and silver pricing continues to push to record highs.

Tomorrow's economic data include ADP payroll numbers, Auto Sales, Construction Spending and the ISM index (a correction from my yesterday's thoughts).  Again, economic data will be the market driver only if numbers are significantly different than expectation.


Disclosure: No Positions