Pipe Bottom or Pipe Dream?

Is this a…	Pipe Bottom – We will have a furious rally Pipe Dream – We will crash and burn after a few days I don’t care, I just wanna smoke the pipe.
	Current Results

Remember that pipe bottom we had that formed the November lows? It’s possible that we made one. I cannot say with as much certainty for this one because you can compare the volume levels between the two. If you don’t know what a pipe bottom is, notice the red and white long candles in November and how they “canceled each other out”. They are effective short-term reversal signals.

I am expecting to swing long this market and enter longs on any decent pullbacks. If you look at the 10-day chart, we formed a cup, and the question is “do we form the handle on it or breakdown like a dumped gf”? This is why I like to wait for a successful test of the handle, if there is one. On the breakdown, I will add shorts. It’s simply not easy to tell at this point.

Either way, there is quite a bit of significance to the move that occurred yesterday. First, it canceled out Monday’s losses. This at least gives the market some hope for a bounce. Second, the bounce occurred on the lower trend line of the DJIA’s down sloping channel, the COMP bounced off of 1400, and the SPX on the 740-750 major support level. This gives added significance to the move. The downside to this? Someone can open their mouth and plunge the markets immediately.

I have no comment on Obama’s speech yesterday except for the fact that there were A LOT of promises made. I don’t know man…

I’ll be taking it easy today due to my swollen mouth (double root canal yesterday + the ‘feel good’ drugs I have to take).

There are quite a few people who don’t know much about TA. I am writing a 25-article series for WSS that will cover most topics on TA. Here are the articles I’ve written so far:

• 1. Intro to Technical Analysis
• 2. Fundamentals vs. Technicals
• 3. Types of Technical Trading
• 4. Stock Charting Basics
• 5. Basic Technical Patterns
• 6. Understanding Market Cycles
• 7. Candlestick Charting I
• 8. Using Moving Averages
• 9. Playing the Gap

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