Tuesday, February 3, 2009

On course...

Same chart from yesterday...I like how the chart is following my randomly drawn purple line for the retrace :) Anyway you can draw any number of ascending triangles today (though not supported by volume divergence), I have one in orange. I think a pop tomorrow with one last try at the 50% retrace (84.63)...then down from there. I bought some puts in the 84.3 area today...deeply...deeply regret closing out WFC puts yesterday, banks looked sick but the market was recovering.

I normally concentrate strictly on SPY...but there are a few others I will be loading up on this go around. SRS as I think CRE is going to be bad (don't get me started about SPG paying its dividend with stock...who wants to be diluted each quarter???). WFC, JPM puts as they have out performed their peers, but a closer look reveals ALL the US banks are sick. SPG puts or just a flat out short.

Is there a chance we could rally to 85.5 or 90 or 100+? Well yes, and then I would have to rework the wave counts. In fact if you were swing trading the channel you would be long right now and looking for about 100 before going short (depending on what channel you were using).

One of the keys to watch is if we break the lower green trendline. It starts at the November low and we have touched it twice since. If it breaks, it definitely confirms the current direction. Whereas a break of the upper trendline could confirm a rally is in progress.


jacksoo said...

H&S forming on the ES 30min - neck around 807 - tgt around 740......??? What d'ya think?


Pokerden said...

Looks ok...but I am of the camp that the true HS patterns are reversal patterns and you have to be in an up trend prior to entering the HS formation.

jacksoo said...

thxs for the feedback