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On a long
term basis:
1. The market changed
the trend into an up trend.
2. We made a double
bottom, came up with lots of momentum.
3. Expect this up trend
to last 4-6 months
On a shorter
term basis:
1. The first wave of the
up trend needs to be confirmed
2. The market needs to
pull back and test the breakout levels.
3. If it holds, the
market will resume the up trend.
The market
is a bit confused right now. It is very excited about the rally on Tuesday,
Wednesday and Thursday, but it is not confident yet.
The market
was in a down trend for 3 months, a quick bounce is exciting, but it is new
and untested. Many people call it the "Thank Goodness" rally. If
someone was holding a position that has been moving against them for three
months, they would use this rally to cover a bit higher than worst case, so
they say "thank Goodness".
In my
opinion, this is the real thing, it is developing into a real up trend. After
the initial pull back, the market will confirm the new up trend, establish a
really solid bottom, and then we will get the real up trend. It is wise to
wait for this test before you go in with both feet. Make sure that the
overhead supply of the last three months is not too much for the up trend to
handle. We should be able to take on nice positions on the long side by the
end of this week.
No new
trades for tomorrow, we will let the market pull back.
Hope this helps,
Shay Horowitz - ShogunTrading
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