Monday, August 27, 2012

Watching coming bearish wave

The market finally closed under the trend average for a second time today, so we could technically label this as a confirmed bearish short term trend change. However, the only issue I have is that the TA has not started sloping down yet one could make the argument that we need an extra bearish day for a valid confirmation. And I think we will see that extra confirmation tomorrow as the bounce wave seemed to have topped today and there is a bearish MACD cross on the 30 min chart. So I am watching just how strong this coming bearish wave will be. If it looks like the ABC wave from 1426 then we will have a double ZZ and the correction should end around the Fib retracement area/50 day ma. However, if we see a strong sell off then we might be in for a much stronger correction that will challenge the 200 day ma. For now, I continue to hedge my longs so we'll see what the next few sessions will bring.

Long Term Portfolio: 100% Long
Short Term Trading Strategy: Hedged with VXX as of 08/24/2012

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