Sunday, February 21, 2010

Say it isn't so...

There was a bit of a break of the rising channel up that represents minute [ii]. Other than that it looks good as its at the 62% retrace of minute [i].
VIX daily looks beautiful with a touch of the lower BB. Looks like a good point to rebound from. we have a problem. The BPSPX:CPC has now crossed its 20MA from the bottom. This has typically been an early indicator to get out of your short position. I have drawn green lines where this has happened in the past. Its not that we are going into a bull market...but rather sentiment based on a combination of the bullish percent index and the putcall ratio is now moving up strongly.

At this point we just have to watch the market closely. On strictly EW terms I expect the market to fall like a rock at some point next week. There might be some upside room but there is currently strong resistance right above the current price levels. If BPSPX:CPC moves up strongly again tomorrow, I would say its time to scale back on the shorts.
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