Monday, November 8, 2010

Market Update November 8th

This is the 10th week of the rally and I've been saying for about a month that this could be the week where we top. But that is just speculation on my part, I am inclined to think the market likes to repeat itself in time and prices so it will be interesting to see this actually happen. We are still above the bullish trend and any pullbacks that stay above "the level" should be considered an opportunity to go long or cover shorts to improve avg cost. Today's negative close showed there was indecision in the market and given the fact the dollar has dropped to levels where the market was at 1180, there is a possibility of a pullback starting in the next couple of days. However, I can't ignore the charts and they are pointing to either a W4 triangle that will land us in the 1230+ territory or an ABC with a sell off about to start. Either way, I am expecting a pullback tomorrow morning and since I am holding overnight shorts, I will cover only if we do not close under the level on the next intraday pullback. I was perhaps premature in shorting at 1213 but it is still a safe level considering all other factors.

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