He had been bullish, but Oppenheimer’s Carter Worth tells us something serious has happened in his charts.
Looking at the long term up-trend that had been in effect since March 2009 he says "we've broken that up-trend."
That's a problem because ”that’s what’s kept us on the long side for most of this time,” he says.
As a result the whole big picture is called into question.
Now the question becomes ”Is this a cyclical bull in a secular bear? Or is the secular bull in tact despite the damage? It’s anybody’s guess now.
Looking at the market from another angle, we had a six month advance but after the sell-off we’ve more or less unwound the entire QE2 run-up. That takes us back to pre-Jackson Hole 2010 levels.
And to make matters all the more severe “we’ve compressed all the gains in a matter of hours.”
Going forward Worth suspects that advances will probably be met with resistance.
And the technical damage likely reflects a damage to investor psychology. "I can't imagine anyone going out and saying I've got to find a mutual fund for myself," he says.
All told, we have a problem.
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Trader disclosure: On Aug 10, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Seymour owns (BAC); Seymour owns (CSCO); Finerman and Finerman’s firm own (AAPL); Finerman owns (BAC) and Finerman’s firm own (BAC) leaps; Finerman owns (JPM) and Finerman’s firm owns (JPM) stock and (JPM) leaps; Finerman’s firm owns (M); Finerman’s firm owns (MSFT); Finerman's Firm Is Short (IWR); Finerman's Firm Is Short (MDY); Finerman's Firm Is Short (XRT); Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts; Nathan owns (AAPL) call spreads; Nathan owns (BAC) put spreads; Nathan owns (CSCO) call spreads; Nathan owns Gold puts; Dennis Gartman is long the Yen; Dennis Gartman is long Gold; Dennis Gartman is long Crude Oil
For Brian Modoff
(CSCO) is an investment banking client of Deutsche Bank
Deutsche Bank has received non-investment banking compensation from (CSCO) this year.
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