Tuesday, October 18, 2011

Sideways Correction?

The market bounced more than I had expected and this now opens the option of for an "expanded flat" or a sideways correction. This would be that the uptrend is so strong that the market will correct mostly in time but not in price so we'll have to revisit how to trade this wave. Right now the TA has risen to 1197 and whenever this average catches up with the market, there is usually a price burst which it will be to the upside if we keep trading sideways. The market closed over the TA and the FTA from yesterday so it ended the day bullish. So I'll be watching how the market trades once it goes under the FTA again and probably use it as a stop as it is getting riskier staying short despite that fact that we are clearly overbought. I expect the 1190's level to be revisited again before the market makes up it's mind.

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