Stock Market Moving Higher
It's around noon time on this first trading day of 2009 and we some some strength coming into the stock market. Stocks have been quiet over the past few weeks and now appear to be moving higher.
If you look at the above chart of the NASDAQ you'll see an inverse head and shoulders bottoming pattern which could mean the market has put in a bottom. I am out of my short position (even though my protective stop hasn't been hit) and flipped to a long position in the Q's. We'll see what happens.
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4 comments:
Kevin,
I beg to differ with you on the pattern. The shoulders are not symmetrical and the arm pits are way off. I see more of a double top in SPX, DJ etc, with confirmation on a close below @ 857on SPX and 8500 for DJ. Also, they are way over bought and I expect some selling beginning next week. Today is day 28(sort of mid point) from the 11/21 bottom and I expect market to go down hill from here to retest the lows 28 days out from today -probably mid Feb.
Thanks
This write up is a follow up on my comment made a few mins back about the market direction:
I had commented (#4) on your write up of the Q's on 12/11 saying that market is likely to rally the following week. It took 2 more weeks than I had thought, but today it cracked the 30.83 made on 12/9.
Looks like market did what I htought it would do (hence I did not short the Q's) while I now think the market is headed down, and hence I am short SPY and the Q's.
Obviously we have opposing views but I thought I would share my 2c worth with you. I respect your views and patience, a virtue I wish I can learn and practice!
I agree with you about the head and shoulders pattern not being symmetrical but I have other reasons to believe the market may go higher such as a falling yen, breakout from a low voliatility trading range, seasonally January is bullish for the market, closed above the 50 day average etc.. I think it's worth a shot geting long here with a tight stop.
i also intitiated my shorts on SPY..but willing to see if i am wrong. Will be much surprised.
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