Friday, January 21, 2011

Market Update - January 21st

The market ended up going up to the higher "B/W2" label and this should have completed an ABC move from the 1271 low. So if the chart is right, we should see continued selling on Monday to the 1260-1265 area (anything below 1271 will work for the bearish case). The market however failed to confirm a bearish change of trend by closing just above the 1283 trend average, which still gives the bullish case some hope. As I posted on Monday, if the market starts hesitating around the 1280 level without breaking this level convincingly then it will just mean it is getting ready for 1300. So my strategy is to cover at break even on my shorts (1291.5) if the market decides to rally and catch it again at a new high.

Have a good weekend!

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