Wednesday, April 4, 2012

Close under Trend Average

The market decided for the red option posted yesterday but so far 1391 has held, so optimists need to come out buying tomorrow or else the trend will start to turn. From the wave perspective I only see 3 waves down so we would get a better guidance if we saw a 5th wave materialize tomorrow and take out today's low and perhaps 1391 along with it. We now have clear catalysts to initiate a substantial correction (end of Fed help, Spain bonds) so maybe we'll finally see a true sell off. In a way the bull argument is getting difficult at this point, if we get good economic numbers then it reinforces the notion that the Feds will no longer intervene and start raising rates. On the other hand, if we get bad numbers then the possibility of an economic slowdown will hit the market especially since Europe and China are slowing down. My most optimistic prediction from early December 2011 is now a reality and I think it's time we get back down to 1300 or perhaps the 200 day MA?

Today I traded some XIV and trades were logged as follows:


1 comment:

  1. Hey! Loving your analysis! Wondering what your strategy is with the XIV? When is it good to buy? Seems like you know how to trade it. I wanted to play it today, but didn't have the guts.