Thursday, June 30, 2011

1370 High to be challenged

The market cleared the 1310 resistance and the 50 day moving average and it is obvious now that bulls are back in control. It's not clear to me if the correction for this wave will come tomorrow or early next week and it remains to be seen if the correction will be a W4 of the nested 1-2 I posted last week or a W2 of W3. Whatever it is, my game plan is to re-load longs on margin at the first TA test which I am assuming will be around the 1300 area (it will take couple of days for the TA to get there). I sold the rest of my margin longs at the 50 day ma and keeping my core long position.

Also, today I posted a chart of the overall picture. Note the divergences in the MACD and RSI and the low/highs for the markets in the last 6 months. It is clear that every pullback we've had have been corrections and the market looks like is headed for new highs in the next few weeks.

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