The Dow Jones average is once again gunning for a congestion area. It is closing in on its downtrend line and is not far beneath a horizontal line of resistance. 12750 should be watched closely for a reaction. Also, the bulls need the Dow to maintain the 50 day average.
A trend following and trading range setup would have one get short around 12750.
I will become cautiously bullish should the Dow test and hold the 50 day. The Dow has been the strongest of the indexes.
The SPY is still floating beneath its 50 day average and a falling line of resistance. This resistance must be broken.
The Nasdaq is still in need of some repair. 2330 looks like a good place to watch for a reaction. That area will get the bulls above resistance and the 50 day average.
I am still bearish. I do not believe there will be enough cash committed to push the markets through resistance. I do not think that enough investors truly believe this to be the bottom.
However, it will be all I can do to not buy some stocks tomorrow for a swing trade. I may just add to my [[MBRK]], and try and sit the rest of the week out.Â
I am damn tired of shorting. Lately, short profits must be harvested intra-day, and that has been difficult for me to do.
One important note: If this turns out to be the bottom, I will never ever short stocks again. The government seems to want to ensure that I can stay fully invested all the time and never see greater than a ~15% drawdown.
I like your charts.
As far as MBRK, Sheesh, Edward M. Rudnic sold some of that stock for peanuts back in November. I bet he’s kicking himself now. I thought insiders always sold at the top?
Small cap pharma? Too volatile for me. Good luck.
Link- there is something going on with MBRK. I’m not sure what it is. I’ve got a 1/3 position right now and will keep adding until something changes.
Something going on, yes, it’s called speculation. Reminds me of DNDN last year.
LOL at “Goat Tits Formation”. Definitely bullish, yeah?
That’s how bear markets roll Wood.
Sharp moves. However, in general, the trend is lower.
I’d bet my goat farm today was not the bottom.
wood wrote:
One important note: If this turns out to be the bottom, I will never ever short stocks again.
That attitude is exactly what Bernanke is shooting for. His job is much easier if he can scare the bears into ignoring the economic reality.
Bus as we all know (and as the NASDAQ neatly demonstrated at the start of the decade), scaring the shorters out of the market leaves you with nobody willing to buy when the market drops.
Me, I view Bernanke as a cowboy bravely riding out in front of the stampeding herd, whooping and waving his hat and firing his rifle into the air. Several times now he has turned the herd back. We know he will try again the next time the herd panics. But he doesn’t have unlimited ammo, and whatever has been spooking the herd is still out there. And it is too big to bring down with a rifle.
IS the DOW still as easily manipulated as it once was? Do you buy into such theories?
Excellent analysis though, as always, I continuously learn a lot from you. I guess one could say, the trading day is never done until you get wood 🙂
Wood a couple of questions for you, maybe it’s worth a post for the TA retards like myself.
Your methods seem to be longer-term views of charts (vs the minute-by-minute methods that Tim Knight seems to use in his excellent Slope of Hope blog).
My question to you with (what i think is) a longer term view of charts for trends, how much “weight” if at all do you put on these emergency measure type events that happen.
That’s the one thing I have a hard to wrapping my knucklehead around the idea that I don’t see how there can be a valid turn of a trend with artificial measures, or is this how long term trends really change?
I’ve always believed that once you hit a true bottom, not much happens either way for quite a bit of time.
nice TA wood, thanks for taking the time…..nice to know i can be lazy and just wait for you and/or trader mike.
whenever i get bummed because of one of these logic-defying rallies, i just repeat this in my head 5 times:
“bear market rallies are fierce, dont be fooled”
Goat Tits!
Nice analogy! No seriously, not baaaaaaaad.
lol @ treepart
Wow,
that is a good question. I do not think the artificial measures can prevent more lows.
A test I really want to run is to use fed intervention as an indicator and run tests as such to see what has happened in the past.