Indices rangebound ?

Indices are trading in a well defined range.....

S&P 500 since 2nd wk of July 2011 is on a roller coaster ride as listed below :

-1347 to 1101 Down 246 points or Down 18.26%...sharpest decline in a long time in straight four weeks...

-1101 to 1208 UP 107 points or UP 9.7%

-1208 to 1121 Down 87 points or Down 7.2%

-1121 to 1231 UP 123 points or UP 9.8%

-1231 to 1174 Down 57 points or Down 4.63%...so far

SO..IF we go with recent history...then there is another 2.57% on the downside..which should take us down another 30 points to 1144 area.....

Market biggest foe is US politicians who always promise "moon" but in the end give us very little.....I expect the same from President Obama speech on Thursday..."talk a lot but little impact in terms of jobs"

US market has been kind to "inaction by politicians" while US economy is hurting big time....

IF market does not like what Obama all talk no action speech...then we could go to 1100 in a hurry...& IF rhetoric gets out of control then we could test MAJOR support in 1040 area.......which is a long way from current 1174..a big drop of 134 points or another 11.41% drop..which MAY add up to 16.04% drop in current downturn.......

Economic reality of US & Europe has been an ongoing question mark, with lot of rhetoric but with little or no improving results ?

Most investors have been very patient & hopeful that this shall pass...BUT this economic mess came to forefront  in August of 2008...it is now 3 years & 1 month later..we still are fearful of Europe contagion & US recession...the question is, WHY these problems are lingering for 3 years plus ?

TAPE has been of "BEARISH" nature.......since July 2011......

It is important to recognize a bear market tape & reduce exposure accordingly.......

Luck may not help as we go along in this bear market.......

In previous time of economic stress, there was coordinated moves by President, Congress & Fed...NOW it is only Fed which is left to deal with this mess.....politicians are too happy to see economic mess....they think it will benefit them or their party in re-election ?.....so this dangerous game goes ON......@ the expense of consumers, employees, business & entrepreneur......

RSI in S&P 500 @ 44.32....

VIX 33.92

Oil $86.45

Gold $1876.90

Oil prices are reflecting slowing GDP growth worldwide.......

Gold prices are reflecting debasing of many currencies.....as it becomes currency of choice to counter inflation & falling currencies.......

SO...tread this market with great caution.......days of higher highs in stocks except gold may not happen for a while...

Here is RSI of many popular stocks :

AUY 70.23
GG 61.47
RIMM 57.55
POT 57.22
PCLN 56.92
MOS 55.21
WYNN 52.10
SINA 50.96
#AMZN 50.08
CMG 49.92
*BIDU 49.12
AAPL 48.83
#LULU 48.62
CNQ 43.81
GOOG 43.64
*APKT 42.75
PLCM 39.70
MGA 39.37
JCP 38.05
*NFLX 37.60

* denotes my portfolio
# denotes my next purchase..IF price is right

RSI numbers are indicating where opportunities are better, IF  market conditions are healthy.......

Good luck with your strategies & your OWN homework.

BLOG does NOT give buy or sell.

Saleem