Monday, February 22, 2010
Another Monday Gap Up
The buyers come rushing in on Monday as the norm these days. The squeeze continues, and we'll probably need to get to 1115 before we get that turnaround. I would be very surprised to see a big trend day up today with the current overbought readings. I am fully short again, and expect there to be a gap fill at the least today.
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4 comments:
Owl, I think your trade should be to buy dips and not short moves higher. Even though we are in overbought territory we might just move sideways to work that off, then continue higher. Here is a technical view:
Feb. 22 (Bloomberg) -- There is less chance a so-called correction in the stock market will continue if the Standard & Poor’s 500 Index remains above the 1,107 level, according to the head of technical analysis at Credit Suisse Group AG.
The rally in the S&P 500 last week pushed the benchmark measure for U.S. equities above 1,107 for the first time in a month. The gauge fell 8.1 percent from its high on Jan. 19 through Feb. 8, approaching a 10 percent decline that is commonly defined as a correction.
The next resistance levels for the index’s March futures contract to cross as it rallies will be at 1,116 and 1,125, David Sneddon, Credit Suisse’s London-based technical analyst, wrote in a report today. If these levels are breached, the index may rise to 1,148, close to the January high of 1,150.23 on the index and 1,145.7 on the March futures contract.
The S&P 500 Index closed at 1,109.17 on Feb. 19 and the gauge’s March futures contract closed at 1,106.2.
“The S&P has staged an impressive rebound,” Sneddon wrote. The S&P 500 above 1,107 “lessens the threat of a lengthier corrective/consolidation phase.”
I will probably be a buyer on a 2% dip if it happens this week. But I think we won't be able to rocket higher from these levels at least for a couple of days. That should make shorting ok, but I don't think we'll crash down this week.
Natural born short seller. They don't really know how to get long anything, it's a psychological predilection. It's like having a unovercomeable fetish
Buyers need to allow a drop of at least two days before buying. We're still overbought.
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