Tuesday, August 28, 2012

Bullish or Bearish W2?

The market follow through somewhat with the bearish wave that started yesterday but it quickly found support early morning and I am sensing the same type of ambivalence we typically find on a W4. One could argue for an Head and Shoulders formation targeting the Fib retrace territory but at the same time, the quick low today could also be the "head" of an inverted H&S formation targeting 1434 so things are still up in the air. And to add to the suspense, I can see a W1-2 to both the bullish and bearish side so I think we will see a strong wave(30+ points) breaking out very soon. The short term trend is still slightly trending up despite more than 2 closes below the TA and this is due to the fact that the bearish closes have been so close to the TA that it doesn't allow for the trend doesn't turn down. So today I decided to sell my hedge at break even and will re-hedge if the low today gets taken out.

Long Term Portfolio: 100% Long
Short Term Trading Strategy: Shorting intraday extremes, closing same day

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