Day three of market psychosis (The Dow went up 85 points in the LAST MINUTE of the trading day yesterday) and now the daily charts show a definitely overbought condition.
Most of the averages are just under the 50-day EMA (poking above the 20-day). The last three days were very very dramatic and very noisy, but the fact remains that I can't get bullish until the lows are challenged again, so playing it by the book I have dutifully set up buy stops on my bear funds (yeah the ones that have smacked me down this week). I've use support/resistance from 15-min charts to hopefully get better buy points, but not much better since the volatility was so insane yet again yesterday.
Yes it's been dramatic and a good 3 day run for the bulls, but again: a three day run right into the 50-day is a textbook place to short the market, not buy it! Besides the craziness of the run should make the permabulls at least a little bit nervous: it was mostly short covering (and I helped with that unfortunately)...the question now is less folks are selling today, but is anyone actually going to buy?
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