6 replies to this topic

[thoughtpwr]

No gap in the AM, however the selloff at the open was useful in getting rid of the overbought burden. I redrew the channel to follow based upon the horizontal retest of yesterday's higher lows. We have rallied well this morning off of those lows and the two strong stocks WDC and MGM, look good as I have added long call positions (in addition to bull puts spreads). However, we should be maxing out at about 1:30 EDST and I would expect us to work-off the overbought condition into about 2:40.  We should be at the lower channel line by then and should rally into the close.  We have overcome the new down trendline at about 11:50 and should begin  to retest that line soon in the retracement.

 

I think we have reached the high for today, but expect us to challenge 236 tomorrow morning. It's at that point, we will be overbought and if we are going to turn down again, I would think it is there. I am not of the thought that we can't retest the lows into Mon-Tues next week before rallying again, therefore I am still trying to figure out how to handle that in the context of my current positions. One way is for the market to gap over resistance tomorrow and sell off into 236 acting as support. To accomplish that, we probably have to finish higher and at the highs going into the close. If all comes to pass that may be the means of reaching 240 in the short term.

 

Unfortunately, the seasonal closing March weakness shows its possible to give much of what this rally will give us, entirely back going into April.

 

 

[thoughtpwr]

No consolidation there, we are currently running strong and will challenge 236 within the hour, if we keep at the current pace. What I would be most concerned about is a selloff into the close at this point. We are in the position to gap higher on the AM if we can hold it here.

[thoughtpwr]

Looking at the P&F Targets short term (% = 0.15), then the SPY has turned the P&F trend positive again today at 235.58. I looked at my other stocks and each one of them is just below that key point with 45 min to go before the close.  A sell off on the close will prevent most of them turning the trend.  However, a strong buy into the close would reverse that for many of them; as would a sufficient gap to allow a sell off which could use 236 as support.

[alexnewbee]

I think it's a final squeeze that opens door for a nice move. Twt

[thoughtpwr]

We have followed in the up channel to this point (3:35), although I thought there was an attempt to follow the morning's steeper channel that failed late. It looks like we have waves 1-2 and 3 completed as of now and likely go through 4 in today's close and tomorrow's opening hours. With the close near, the market may not buy into the close.  I think the market has to go a little higher to break the down trend, so tomorrow's open should go a lot of the way to determine how we go higher.   If we gap lower, we probably sell off for a couple of days. Tough call as to wither you hedge longs at the close or do the best you can after the market opens tomorrow.  I think we have the opportunity to gap higher, so I will deal with the open when in comes.  It would be a shame to give back all the gains from today.

[Charvo]

New low coming up for VXX with VIX contango far below 10% means potential crap hitting the fan.  I'm just in XLP now.  I dumped my QQQ longs.  Thinking about putting on some DIA shorts the next few days with mutual fund buying propping things up.

[thoughtpwr]

VIX closed 3 points lower than peak, so the "all clear" from that perspective appears to be in place, although we can sell off for a couple of days even if the trend has changed. The put/call ratios are on the bearish side and allow a pullback. The question is how far the pullback goes and how many days it lasts. A couple of days in a falling market is probably okay.  As is a sideways flagging market.  The problem will be a pullback last 4 days and takes the market back to the lows or even lower.