In two out of three of my trading systems, I have gone medium and light (LONG) in my allocation (exposure) models. Yes, the market blew out the last possible correcting formation - but at this juncture does overhead resistance seem imminent and at what level? Also, what other indications/formations are TA guys looking at? I use Price and Volume mostly and have shifted to bullish 12-Mar-2009. I know the NDX has been on a tear (up 16 out of 19 days) but am looking for a pullback to increase exposure. Gimme your take. pay$
I would say that the prospects for the broadening formation working out are fading fast. Today was the first close outside of the upper boundary. If we immediately rally from this point, there will probably be a retrace/retest of this prior resistance point, and if it breaks look for the next key support to come into play at the 960ish level. I'd say now that the obvious setup is the large reverse sHs, whose neckline lies at the 960 level. The trend is up, and although it is too soon to completely rule out the broadening formation, it looks like the uptrend will chug on. 50% retrace for SPY is at 1120ish, so is the first material pullback of the rally out of the 2003 bottom. It looks like an important point. The weakening dollar will only help the longs, as will the economic veneers that the fed and treasury are slapping upon the rotten core that is the fundamental picture. Sentiment has improved, and people are pretty desensitized by this whole thing. Can't fight the current. I will say that I'm still really creeped out by the non-confirming volumes, but it took almost a full year out of the 2003 bottom for volume to start gaining into the rally, so I guess I'll forget about it unless we are still contracting into the holiday season.
your megaphone is still intact, the triple chart lines define the pattern. the res line is at 1015, The fact that we are staying under the sub res line,the fact that everyone who was caught short and panicing today only resulted in 115 dow rally lends me to beleive the sellers are loading up here. Wednesday is a cycle day and a lunar event.
It appears to be. I'm shocked that a large, multi-month bearish formation might actually play out in this market. I don't think the government will like to see the S&P, pardon me, the "Nation's Confidence" fall to previous lows, so I'm doubtful that this will get to play out to it's full potential. Who really knows, I could be wrong. There might be some prudent portfolio managers looking to really scale back after a 50% rally in the S&P. Only time will tell. Negative economic stats mean nothing if the money is only flowing in and not out.
I'm not impressed with the volume so far, so I'm thinking the market is heading lower. If we break out of the broadening tip I think it will be from a correction of 50% of the last leg up which would be around 935.