Thursday, December 2, 2010

Market Update - December 2nd - Correction to 1200?

So the market went much higher today and it is obviously gunning for 1227 to make it clear to those sitting on the fence we're going for a year end rally. And again, looking at the last time a break out happened, we had 3 huge straight up days before any meaningful pullback. Whether this will be the case this time remains to be seen. On the EW side, I see 5 waves completed and the technicals are all oversold plus we have a bearish MACD cross on the 30 min (which is the one I like to follow). However, there is one indicator I use (trendlines and different averages) that did not confirm so we might see even more upside tomorrow. Perhaps even one that will blast thru 1227 if the job reports comes in incredibly well or really bad (more QE). Ideally, I'd like to see a correction to the 1200-1210 area and then resume the march to 1250.

I made a mistake today in going short at 1212 and if I get caught off guard by a gap up it will be due to my own impulses and not because of my trading system. I've been honing my analysis over the last year and I'm getting better at shorting which is a highly risky strategy. So I am praying we get a retrace tomorrow to test the level I watch which is around 1198 as of today.

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