Wednesday, January 26, 2011

Are we there yet?

The market did as what I expected yesterday and we had the bullish run to 1300, although it fell short by less than a point. I thought the break out was going to be a clear bullish gap but instead it bounced around in the first few hours and that is a sign of weakness imo. So the pattern might end up being a Rising Wedge or Ending Diagonal for the 5th wave. I was pre-emptive today and re-shorted my abandoned positions from yesterday(1291) at 1299. I figure at the very least we should have a test of the rising trend average, currently at 1288.5 and the fact the market was choppy makes me think there was lack of conviction despite all the "good news" today. So if we get a lackluster correction that's starts hesitating in the high 1280's area, I will cover again. But if we get that strong sell off (which we haven't seen in months), then I'll start selling my longs and hold on to shorts. The ideal sell off should come in a big impulse wave to ends up closing at least 1% underneath the trend.

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