Monday, March 23, 2009

The case for the fall - or not.

I like my wedge backtest scenario from the post below. While digesting this 7% up day I thought I would go looking for what I missed. Well, it turns out I missed the wave count and the suprise announcement from out fearless leaders. What have I found on this journey?

Bulls: ma10>bb 20ma and trading above both, the 50ma has crossed the 100 and 200 ma's, the 100 and 200 are narrowing, weekly SPX RSI has crossed the bear market trend line and MACD is in a bull cross while fast STO is at the bottom, no true divergences yet and on the monthly it looks like the MACD histogram might put in a shorter candle while RSI is headed up.

Bears: Possible back test, out top of BB on 60m, rising wedge with throw over on E touch, in wave 5, 30m topped out, 1m put in 4 gaps (if not more) today, SPX in retracement zone from 943 top, 1/2 gap fill nearing 826, SPXA50 over 300 (up from 29), CPC super bullish, daily indicators nearing topped out state, VIX at 42 solid support, VIX did not fall in the late climb today, VIX at 61.8% retrace from last top, VIX daily looking bullish, and the market is slightly overbought.

I reluctantly added some SDS at 3:58 today. I am 40% short now and looking to add the rest soon. The overbought conditions, wave 5, the VIX holding 42 and the back test are my main drivers. Getting my ass kicked by some BS announcement that won't help anyone but the super banks is just not right. I'm happy that the market went up, but it would be better if it were deserved. Form your own opinions. I have given both sides a decent look.

Good luck today.

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