Tuesday, November 23, 2010

Market Update - November 23rd - Bounce to the 1190 area tomorrow?

For all the commotion on the Korean issue and Ireland, the market completed a C wave that measures 1.38 of A. In other words, it looks more like normal correction than a sell off since the market did not even close the gap from 1172. However, the market is flashing bearish signals by refusing to close over the level I watch which was 1193 today. For the market to go into bullish mode again, it would have to close over the bearish trendline and not make a low below last week's 1172.

I closed my shorts today at 1185 and went long FXI at the 1181 level. And admittedly, the Korean situation does make me somewhat uneasy staying long overnight as I am familiar with the Korean conflict. I was in Seoul couple of years ago and toured the DMZ area and these countries are ready for war at a minute's notice. Technically speaking they are still at war and considering Kim Jon-Il is a little nuts I wouldn't be surprised to see some bizarre North Korean event.

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