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Did This Bounce Change the ST and IT Pictures?


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#1 redfoliage2

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Posted 26 December 2006 - 01:49 PM

I see we head lower in the IT. :D

#2 pdx5

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Posted 26 December 2006 - 05:38 PM

ST makes sense not to be on short side for 2 reasons: Seasonality and lots of unrealized profits in long accounts. Why pay taxes one year sooner than you have to! IT, could have a nice little correction in 2007.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

#3 arbman

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Posted 27 December 2006 - 01:59 AM

There has been some huge Fed activity along with the elevated borrowing by the dealers, the option premiums declined at the closing. The equity P/C came over 0.6 two days in a row now. The OEX is rather neutral after very high ratios near the top. The internal momentum was not too bad and appear to be turning. I would think there will be a scorch attempt here at a minimum, I am mostly flat, but I will nimble ST longs. For the IT trading, this repo and dealer activity is similar to the last spring's, if the indices can not manage to blast higher over the next 3-4 wks, I think it is safe to expect a deep IT correction for the Feb-August time frame. So, this could be the breath top forming in RUT, and the market is now going for the final large cap top, unless it did and this will be only a short covering rally mostly. The growth stuff on Nasdaq that topped 4 wks ago was followed by the topping action in the small and mid market caps since the middle of Dec. These are probably indicating that the IT top in the large caps is coming, so this rally or bounce is rather important in postponing the timeframe for an IT correction. I am not sure one can call an approaching longer term top with the current setup... - kisa