Next week earnings report will start once again, it is also options expiration week, and these things will definitely create some volatility for the market. In this earnings reporting period, the market will most likely be keying in on the forward looking projection and not too much on the actual earnings (unless it is short of projection.) As more companies give cautious and less optimistic forward looking projections, the debate on the possibility of a double-dip recession will be elevated. I believe the market will continue to be pressured until either the double-dip becomes a reality or there are signs of a sustainable economic recovery.
Here is the updated SP500 chart. A downtrend price channel could be forming after the failure on the widely watched head & shoulder pattern. Until the market breaks the lower high/lower low pattern, I will remain bearish.
