S C A R Y !

This has probably been the scariest week I've had in the market in a very long time. Buying was scary, selling was terrifying and just looking was frightening. SPY, the S&P 500 ETF, (weekly chart shown above) must have had its ugliest week ever. I mean, look at that monster 10-point wide body that basically opened at the high and closed at the low. And the volume! Off off the chart.

Is it overdone? Probably. Is it over? Probably not. We are however right on a rising support line starting from the July 2006 low. We're also bumping against the 40-week simple moving average. The 14-day RSI is at around the level that stopped previous corrections.

It's interesting to note that each correction since last summer has gotten shorter. Last summer's correction took about 2 months. Last February's correction took about 2-3 weeks. Could this "correction" (I have trouble calling this monster a correction, especially since this could turn out to be the first salvo of a much more protracted bear move) last 1 week? It better start reversing fast, then or else.