Reversal of Fortune

The sun goes out and night comes in
The time goes 'round and days grow dim
--Psychedelic Furs

The rally that some (including me) thought might surface yesterday never materialize. After a rally attempt, major indices flipped over and sold off to the tune of 6-7%. This puts closing prices at levels last seen more than 10 yrs ago.

On a monthly basis, it is possible that the technical damage can be 'reversed' if markets rally over the next week and close higher by month's end. That would leave a long 'whisker' at the bottom of the November candle. Long whiskers are often interpreted as significant bottoms--particularly if they are accompanied by significant volume (which is virtually assured this month). Note on the chart above that whiskers in late 2002/early 2003 months marked cyclical lows a few years back.

Markets around the world reversed higher last night and futes are strong this am. Let's see what happens.

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