The SPX took out the rapid descent downtrend line as it continued to rally. But the market
shows no signs of stabilization yet, so it is fit to play only for the most seasoned, astute traders
who can watch the tape full time.
Up is better than down, but the curent recovery trajectory is nearly vertical and is far too steep
to be maintained. The boyz have run the shorts off the range and are feeding on the positive
momentum, but we know this will not last, and we also know that after even a mini - crash, there
can be bounces and wicked sell offs which follow quickly as the market in effect seeks to verify
a low or bottom. Check out the action of the SPX in mid 2010 here and for the modern grand daddy
of ongoing bull market crashes, have a look at the post Oct. 19, 1987 crash action here. Notice
the nearly vertical ups and downs before a rapid sell off established the bottom late in the year.
My plan is to let this market settle down and show some relative stability before jumping in long
or short. If that takes a month or two so be it.
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