Monday, March 2, 2009

Is there any other way?

Previous Trade Day
The market is showing continued weakness as we receive more and more bad news. Friday setup a bit odd yet again with a fairly narrow range after the gap open just to sell off again into the close and closing as bearish as it can be.

The market attempted to close the gap but failed, TR had mentioned this in the comments on Friday. I did not think the market was able to pull itself together to 1) get above the 741 range and 2) reattempt the previous close after such an open. I expected further drops to my target of mid 720.

Keep in mind though that most gap fills that could be considered bullish are completed within a much shorter time frame - the market needed until 2:00 to fill 15 points.

Pre-market already down into the 710 range, though I would expect the 720 to hold, of course getting towards the 700 range we can expect quite a bounce, the market likes round numbers so here we should find a bottom on the short term, more of a bottom then our 741 range.

Its funny, I was reading quite a bit this weekend and many analysts now are coming out and saying things we have been saying for a while, 6000 range on the DOW, 600 on the S&P, Buy and hold not working anymore, those were the same people calling the bottom at the 800 range back in Jan, and the same people that last year were buying more and more to add to existing long positions. I will be posting a recap of all of my long term outlook posts this week with some more details and some new information.

How to trade this?
Monday, big gap open, horrible news in the market place, new ranges. All signs to tell us to remain on the sidelines today and determine how the market will behave to such bad news and the new ranges. There is a chance to see 704-707 today so depending on how we arrive there I may convince myself to take a small long position but this is something we need to determine once we arrive there.


  1. Great commentary, really appreciate all your time and information. Please keep it coming!

  2. I'm going with a small long position around 706; if we make it, and if we don't totally break down. Otherwise, I'm staying away from the broad market... trading oil instead. :)

  3. yeah thats pretty much the only trade I would engage in at the moment. I feel the 700 range will at least hold for 3+ days, maybe even a week. So far everything is setting up perfectly to hit my mid targets for price and time - mid 600's towards the end of this month. I mentioned there is a chance to get there in 2 weeks (mid this month) but I feel we will hold a bit longer.

    Now I said today I will post some new information this week, while I should probably wait for confirmation around my final targets, I feel we should see quite a rally off the 650's and it should hold quite a bit longer. There are some really strong reasons for it and I will go into more detail soon. Additionally I will also be able to share when we will hit the lows for 2009 and what price it should be so be ready =)

  4. Watch the ranges here carefully. I feel we are setting up for the bottom in the next 15 minutes.

  5. is this "Todays" bottom your are talking about?

  6. yeah I was talking about today but we keep on testing those lower ranges here, we should have rallied and did not. I still feel we will hold this range here but its looking very bearish at the moment.