Friday, May 29, 2009

Another one to the list ...

Quite a volatile day yesterday. We opened right at key resistance and remained there for almost 30 minutes. This was a clear sign of buyers not able to make the gap stick. We sold off hard and seemed on our way to the key 880 range.

"For the bull case to continue a rally is needed before reaching 880."

It seems the bulls knew exactly what they had to do and get the bears out of the way. We had all the signs for further drops - low volume rise showing a retracement, however, buyers managed to turn the market around and prevent further drops from happening.

"The bears have strong momentum on their side now and are setup perfectly for a clean break of the 880 range. If bears fail on this attempt and "chicken out" it will pretty much show defeat giving the bulls the upper hand to take this market wherever they want to."

Well, maybe not wherever they want to, but at least another chance on the upside. Me being a strong bear I have to admit I am devastated and frustrated - almost too wounded to try the sell side again. Many other sellers are feeling this same type of attitude. As a result the bulls have quite a big advantage now. It is my feel that if we do see another attempt on the upside today, we will succeed as bears will be waiting on the sidelines.

Bulls have the upper hand yet again, while it seems this changes on a daily basis further continuation today is likely with a break above 920. Bears should not be reattempting the sell side here and more bulls should be coming in with buying interest to take the market higher.

If the bears can manage to turn the market in the first 1.5 hours of trading we could see follow through if we manage to break 898 on the downside.

Support and Resistance
We have similar numbers as Wednesday so not much has changed. There is a small adjustment on the lower range but other then that same thing.


Side Note
I wanted to thank schismatic for the note yesterday. Thanks for reminding me again of my stubborn nature, helps hearing the obvious sometimes =)

Sam - "The question is what will it take to convert you to bull. your line in sand. I think to cause the maximum pain everyones lines in the sand will be blurred."

I have to admit, I have never been as bearish as I am now. I do not want to turn this into a political post and start talking here for the next hour about my issues with whats currently going on but I cannot see any value on the long side - not with where we are in terms of valuation and price. I have to face the fact that I missed the rally.

Now what do I do from here when we have had one month of sideways action with me chasing a point of view? Well its time to stop chasing the point of view. I had mentioned I will be taking a bit of a break, a break from my view and focus a bit more on short term trading. My P/L is loving when I am in and out of a trade the same day. Every attempt to build a longer term position shows drops in my P/L. Its been that same story for the past 2 months - got to learn sometime.

1 comment:

  1. Bears are cautious, which is good. Downside probabilities are more than the up. here just FYI

    Alert Update: Institutions were in very LOW Accumulation with their Buy/Sell SPREAD increasing slightly. Buying increased, and Selling decreased. Accumulation was so low, it was essentially Neutral. *** Note how Institutional Investors are keeping Accumulation and Distribution nearly equal as they approach the end of the month.

    Wednesday's comments: Remember our comments about a Neutral condition? "I have seen Institutions take the Accumulation/Distribution to neutral and then goose it up again, so be patient while waiting for a short condition." -- We don't know, if they are in fact going to goose it up again, but we can see that Institutions halted the direction from going into distribution yesterday. The Alert remains on because Institutions are close to a level that would put them in a Distribution direction/trend