We have broken the pennant. And we have what looks like a descending triangle.
My expectation was that we would break it to the upside. Then reverse and go lower.
many times when you break a pennant, it goes the opposing direction it broke. (it broke down, So we would go up).
honestly i don't know. I'm more optimistic than I was before.
But again, a nice spike lower on monday/tuesday.... We have played that game before.
Wednesday, October 22, 2008
Sorry no chart
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I bought some SSO, to start.
Think we'll go to 815 on SPX then we bottom.
TW, You bought SSO expecting SPX to go to 815? Huh.
The support on held on SPX and DJIA into the close with a 200 point rally in the last half hour despite the fund liquidation or program selling or whatever caused the selling.
If the SPX cannot break above resistance at 990 or so, then the next leg down may break support. It seems very tenuous, but oversold.
I bought SSO as well, but too early in the day, and then averaged down right at 3:30 pm.
Damn, I wish I hadn't covered so many shorts yesterday.
It seems that if Armageddon were being factored in, gold would be stronger. Where is all this cash going to go?
Something that doesn't get talked about enough, is that the reason... Or my guess is that when the hedgies are liquidating they are running to the treasuries. Santelli keeps asking why people are still running to treasuries. It's the liquidity of them. If they get redemption's they can't be caught in a less liquid bond. They don't want to be in cash, but the 3 month or 1 year is ok. And It's liquid enough to sell.
That retest from Last week is more like a descending triangle, and I lean in that direction. Though..... What may happen is we could keep bouncing off of 8K for 3 months.
No matter what I'd stay short a little at all times. If you are sure we have bounced and are in a multi day uptrend. One could clear the shorts. but I'd wait for a clear uptrend.
I agree. I got a little bit away from my risk management discipline. With the market decline on Tuesday I took profits on a lot of shorts.
I'll be selling into rallies-- if there are any more left this year. Unfortunately, I'm sure I'm not the only person with this same sentiment.
If we can get the volatility down there is a chance of a sustained rally. we need like 100 point days, mixed with 300 pt declines.
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