Whichever perspective you take, all the technical indication point to more downside in the coming months. Historically, this is the worst quarter of the year. July starts the best month of the quarter but this is only in Bullish Markets. July never fares well in bearish markets.

And if that’s not bad news enough, August is the worst S&P month, 2nd worst DOW month and 3rd worst NASDAQ month. And that’s when the market is ‘normal’.

Let’s put the icing on the cake for Q3 - September is the biggest loser on all three benchmarks since 1950.

the DOW would see 11,200 – 10,800 before we had any chance of seeing any serious upside before September. I also stuck my neck out to declare that Oil could well hit $200 before September 2008. And I reinforced my belief that the market will generally be sideways till 2011 around Q3.

I still stand by those analysis. With the DOW just 146 above my first support level now, I don’t expect to be wrong about 10,800 before September. And say what you like about oil … regardless of OPEC’s rants, the Saudi’s vain attempts at being Robin Hood, lumping the blame on speculators, etc … the fact remains - Oil is going up into a bubble. You can argue that it’s overbought and that it will come down but before it does, let’s get real and face facts, Oil is going up. When it does come down, I don’t expect it to get below $120 to $130 pb. This is where the future is. It’s happened before and history has a knack of repeating itself very reliably.

So watch out for Election Julys which have a habit of returning crap, a flat to negative August and the worst expiration (Triple Witching) Friday in September.

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