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Just to illustrate what I was looking at the other day


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#1 dcengr

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Posted 15 February 2007 - 01:09 AM

Also you can see it in DXD volume.

The question is, there was major capitulation today.. that doesn't mean there was conversion. You can have 2 different things happen here. One is, those who capitulated turns bullish and buys.. that could take a few days or weeks. The process is already starting as far as I can see, looking at lowrisk, blogger poll.

The 2nd thing is it goes down, but the capitulators don't short again, which doesn't give the scorch team an opportunity to make a buck at their expense.

My "guess" is a little of both.. some more down, then dip buying by the recently converted. But thats just a guess based on sentiment right now. It could just go up a bit more to flush them completely out. Volume could've been higher, IMO, so a bit of a rinsing tomorrow wouldn't surprise me.

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#2 Caduceus

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Posted 15 February 2007 - 01:48 AM

You can add me to list of capitulators. I exited most of my shorts today and have not yet converted to the long side. I hear alot of noise about the massive rally we are going to see but I think I will wait for at least a new high in the NDX before I consider a long position. "cash on the sidelines" for now.... Also, I just voted in the actual position and market opinion poll and it is an even split in longs and shorts as well as those who are bullish and bearsh. So, typically we should look for a turn....? not that that helps at all if you are looking at the NDX. Good trading, Edit: just for the record the drawdown on my initial short of the NDX (cash index) on Jan 18th (posted here)was about 1.5% my actual loss was a little larger.

Edited by Caduceus, 15 February 2007 - 01:52 AM.