Can the hammer save the market?

• Posted by vinaydh
• on February 7th, 2010

It seems many are focussed on the hammer painted on the major market index charts last Friday. Technically it has bullish implications, more so since $SPX bounced after touching the 200ema.

My thinking is that hammer or no hammer this market is headed down. I think at best it will give a reprieve for a few days. This continues to be a dangerous market on the long side. I am looking for at least a test of 1010 region. This market should find significant resistance in the 1080-90 area. We are also entering the expiration phase and that too should color the market action. In short my bias is still to short rallies. There has been considerable technical damage done and it’s highly unlikely that we will get such an uneventful bottom. We will see, no harm in keeping an open mind but a firm bias.

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