Friday, August 22, 2008

Bear - Say what?

wow was I off on yesterdays action. I was getting to confident in my calls and ignored what I should be doing - evaluating both sides and keep them in mind while analysing the way you trade. Yesterday I made one of the mistakes that I thought I had fixed - finding myself on the wrong side of the trade - I started a short position on our first peak in the morning hours - the market kept on going up and I kept on averaging down on each subsequent peak - it was too late before I realized what happened and had to close out my position with a huge loss by the end of the day - I am very glad I did that instead of doing the wrong and hoping for it to go down - something that I was blindly following (as you can see in yesterdays forecast - very one sided - very wrong - very expensive) - if you read my Tuesday and Wednesday posts you would say "wtf, you don't believe in your own words" - I always try my best to be objective on what the market is doing - something I did not do yesterday.

At least I nailed the high off by less then a point lol (sigh)

Well todays action is going to be trying to see how far we can go. We hit the 1282 mark yesterday and we can anticipate a break here to the upside. This is where we need to figure out what to do - 1292 very possible here. On the low side it is very possible to break down from here very fast - 1274 will tell is what direction we are headed.

Time and Price
2nd high 1292 - we all know this one already, we should expect a test here but no break. A break here and we will see ourselves back in the 1300's and a re-test of our top
1st High 1282 - of course our key point that needs to be broken to continue on the upside
open/close 1277
1st low 1274
2nd low 1266

Today should be a powerful day. I would expect a large trade range on an intraday basis. We need to watch how much we can hold on to gains and how we are selling off - I won't be able to be more accurate on the time component today as its fair game for bear and bull.

Mid Term
Well, here is where we can expect some changes based on todays moves. We are still below the previous trendline - however a rising wedge OR consolidation pattern is followed by a strong move into one direction - a move that did not occur. At this point I am more inclined to a continuation of our trend that started at the 1200's on July 15th. Keep in mind this is a counter trend to the primary bear market we are in - so watch out and do not go crazy thinking the worst is over.

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