Anticipated July Low

We have been bearish on stocks in general since September 2007 before calling the Dow 14,100 bull trap in October 2007 [1]. In early April 2008 [2], we profited from a countertrend trade on the Dow futures. Recently we suggested that the low registered back in January is to be re-tested and broken through [3]. As things have gone so far, we have been proven right -- both the Dow and the Dow futures have indeed breached their January lows.

We have no idea of how low they could go or if the worst is already over. However, price actions on Tuesday prompted us to change our bearish view on stocks in general since September 2007 to neutral.

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References:

1. Called 14,100 Bull Trap in Oct 07
2. Precision Timing YM
3. I Smell Something...