Wednesday, October 31, 2012

Inverse Head and Shoulders 1430 target

What a last couple of days.. mother nature likes to remind us from time to time just who is really in charge. If you are in a position to help, visit the Red Cross and make a contribution to help those that have been affected by the storm.

So after a few days of cash market inactivity, the market continues to trade within last week's range. However, there is strong support in at the 1405 level and there is now an inverse head and shoulders targeting 1430+, so the market could stage a rally from here. If the 1405 level does not hold in the cash market, I think we will go for the market's ultimate goal of the 200 day ma which is now close to 1380. European and Asian markets have been reversing or rallying, so a strong counter rally from here would fit the overall global picture.

I am thinking of buying back XIV with a 1405 stop (if we don't gap up) or at the 200 DMA for the counter rally. But as of now, I am 100% long China and HK.

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