I am quite sure that we will see lower lows before we see higher highs. I plan to hold short at least until SPX hits the 200 DMA. I will add to shorts on Monday, July 30.
The short-term technical condition of the market is very bad.
http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&yr=1&mn=0&dy=0&id=p70080538802&a=225258859
However, on the other hand, we did see a very strong breadth in the July move up, and such strong breadth readings usually presages higher highs. Long-term, this bull market is alive.
http://stockcharts.com/h-sc/ui?s=$NYHL&p=D&yr=4&mn=0&dy=0&id=p26393848542&a=270667283
So I think we see a lower low with positive breadth divergence, which will be a good time to load up on longs.
If the Fed doesn't come through immediately next Tuesday-Wednesday, that would set the stage for perhaps a precipitous drop. Such a drop would be a buying opportunity.
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