What a difference a day makes. The constant struggles up over the past few weeks, always in a mildly bullish pattern, had to leave to some consolidation.
By 2.30 p.m. the market had yet again returned to our strong support/resistance area at 10,528, hovering at 10,550 actual for hours. Our open Feb495 Put was very profitable yesterday to new traders, and came back to break even for those holding this as a hedge for a longer time period.
We'll continue to hold the open hedge put, and watch. What "triggered" the market downturn yesterday was China, and Treasuries rising on concern the economic recovery will slow as the governments withdraw stimulus.
At a Fibonnacci retracement the market is ripe for some short term consolidation, but we think will return to upside for the short term. We're betting that Obama and Global economies will add to the stimulus, as they first wanted to do, and we could have upheaval and massive whipsaw in the market, but that's a way off. Remember, we are only interested in the 14 day period we're in, and the trend right now.
What we found interesting is that even the 3 p.m. hour did not take the market much down. We think consolidation is waiting to happen, and will recommend calls for the risk oriented trading today. Something is "up" from the trade range we've seen, even in our deepest consolidation over days.
And the resurgence at day end to only a minor downside leaves the count to the call.
No comments:
Post a Comment