Thursday, March 3, 2011

Market Update

The rally today was the least likely scenario out of the options prior to the sell off. The market invalidated the 5 waves down I was expecting and instead it seems to be triangulating again. There is also the possibility that this is still Wave B, so the market is unpredictable with all this volatility. But I think we can follow the Triangle lines to see if the market respects it and see how it closes again tomorrow (1333 is resistance). Also, there is a possibility for an Ascending Triangle but it is too early too tell. The last time the market turned volatile and crisscrossed the Trend Average in this manner was the correction in November when it reached a top. I think the catalyst is as obvious and clear so I think we can expect further wild swings in the next few sessions. I am overall net short with some long positions.

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