Well what a day

I was a bit too exhausted yesterday to post an update, but every other blog in the universe has been making big reviews. I figured you guys and girls had enough to catch up on. I am pretty sure every bear that exists has come out of hibernation at this point.

So, lets all calm down here and not chase or overextend ourselves. We need to give this first move a chance to unfold to see what this bad boy is made off. Of course the first move I expect is a move towards 980, however, we are not out of the woods yet, we have had a lot of selling with STRONG volume but lets not expect this strong of a sell off to continue on a daily basis.

As mentioned, lets see this first move play out first before making any targets. I personally have a target of 906-913 for our OPEX week but this could easily stop anywhere from 930 to all the way to 965. So lets not get too excited and wait a bit more.

Now the one thing I have been wanting to talk about is support. This has a very high chance to be the ultimate downfall for the bulls. We have had an amazing rally in the past 5 months but we have only one strong support range, the 870-880 range. Support is quite tricky as you have to seperate between strong and weak support. When support is build as part of an uptrend through small retracements that support range is rather weak and can easily be taken out through profit taking, causing even more profit taking to occur. During our rally we have only had one significant move of the highs when we had retested 880 before our strong rally up. We do have some decent support at 930 but other then that all other ranges had not been properly retested through a strong retracement. The majority of retracements had been part of a typical W4 rarely ever exceeding the 23.6% retracements - those are not support ranges but merely were used to consolidate and remove technical overbought indicators. Those consolidation zones cannot hold up when strong selling occurs and can only be used as intraday guides to take profits or hedge. If we have seen the top of this rally here, it will be quite difficult for the bulls to use those weak support ranges as buying opportunities that will last more then 3 days.

As you remember I had talked about the important FIB 38.20% range that we had broken through - while we are currently in the making of a PERFECT textbook reversal this break will haunt the bears for the many weeks and months to come. So inline with my above support comments, we still have to be cautious of the potential of higher prices this year.

So at this point, for us bears, we have to let the market show us what it wants to do, yesterday was an amazing sign and my account balance was quite happy as the pain I had taken the past 2 weeks had finally paid off. Next target 980, lets see what we will do there.