Tuesday, March 13, 2012

5 waves up?

The market spent 9 sessions trying to overcome 1378 and today it broke it but almost 20 points, so it was a horrific days for anyone playing the bearish side. Volume today was also strong which points to a high probability of 1400+. So while the market is ridiculously overbought and due for a pullback (since last month), it's hard to fight this trend and the mania behind. It's hard for me to think who in the world would be buying stocks at this level but I guess there are enough of them to power this thing up. So I am still labeling this wave as a pontential B of an expanded flat, although chances are looking dim. For this structure to have a chance, we would have to turn down starting tomorrow and see a substantial sell off. More consolidation and it will mean we're going for 1407. The wave that ended the session today felt like a W3 so there might be just one more minute wave to it.

I went margin long on the VIX earlier today but it just didn't feel right to hold these things overnight on margin, so I sold at a loss today. However, I am keeping my original portions of VIX and I now have gone from VIX trader to VIX investor as this position is trapped. However, all the optimism will end as it always does and then the bullish/bearish sentiment cycle will reset. I remember the start of this rally and the news on those days or like BAC, which made its low the day it was downgraded by "experts" and that now has rallied 60% since then.. be greedy when others are fearful, fearful when others are greedy, works like clockwork.

Trades were logged as follows:


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