Tuesday, March 17, 2009

Bottom Break-Out or Fake-Out ?


I think it is safe to say the former. This little run has actually held up, and I say it has another good 700 or so DJ30 points to go. The attached chart shows resistance around 7850, and we may see some retraction as far down as where we started, but I don't think that will happen. We will see some pull back, but only one normally expected during overbought conditions.

So, is this the end of our huge downturn? Not likely. We may see a good couple of months out of this, but I still think the worst has yet to come in my humble opinion. That, in itself, is quite a change from my usually upbeat tone, but let's face it: the market is damaged and it will take most of the year to recover if even then. But we can still profit by riding the waves and not getting greedy. Pick your spots and set your stops. There are many excellent trades available. In fact, its hard to avoid one when the market is rolling, so roll with it.


Have a good one,

Roger

2 comments:

  1. Roger, Miss your posts are you trading durng this time? I always value your comments. I thought of you today for some reason as I was getting the donkey kick me as I was sitting in 3/31/ SPX puts - actually think I got my face ripped off by them. Good news I was long 40 contracts on OIH so that helped me hold and hope for a pull back over the next few days. Wild market would love to hear your commentary. Hope you are well.

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  2. @jc
    I have actually been on the sidelines for a few weeks, liquidating all of my positions in the process. I have been watching this run, and I am now willing to say that the bottom was reached, and I think we can look forward to some bull conditions. Tomorrow, I am once again entering the market, and I will be spending a few hours tonight puting my system back to work, looking for a good swing to hit one out of the park, at least I hope so.

    Roger

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