Gap down was definitely a charm and as noted earlier I did expect higher prices. Now what?
Hopefully we push pass this 1360 area on the S&P and head towards the ABC resistance of 1408 and maybe higher to 1429. 1429 would be great as it would set up a nice spot to step into some shorts.
The Dow needs to get in gear and close above 12400 today, so the bull will have confidence to push us to the 12800 area. 12800-13000 area will provide major resistance and I will be looking at the brokers at that point for some shorts.
Hopefully we get our push to these points because plays off these numbers will be very profitable.
Wednesday, February 20, 2008
Mid Day action
As traders it is good to have a plan. The plan this morning was to buy the gap down and it worked like a charm, as of now we seem to be in limbo as we await the FED minutes. So lets stay nibble here. I think they still want us higher today
GRIM REAPER
Well folks, saying this blog has been on fire since the start of the year would be an understatement indeed. Tuesday played out exactly how I thought it would but was rather surprised that we pullback so deeply. We basically had a 1% gap up which is huge in the different indexes and we totally sold off, WOW. Oil at $100 is surely not helping but also additional news of more credit problems seem to be filtering out again. I have said it many times here since the New Year, there is no way we are at a bottom.
For Wednesday I hope we get a deep enough sell off to buy I personally dont think the bulls are ready to give up totally but that time is near my friends. If we do gap down and selling increases and we don't reverse the gap then my friends I think we will test the recent lows before trying to form a bottom.
I think the brokers and banks in this environment should not be bought, they should be shorted as I think housing will more than likely get worse. GS and LEH are my two top shorts in the brokers with BAC and FNM being my shorts on the mortgage side. Watch for BIDU which I recommended last week for a long play for the week that got over $50+ profit for some downside from here. I think it will dip below $200 within 6 months. FSLR also will be below $150 in the next 12 months too.
I am a bear totally at this point because I think we will have the worst year in the markets in years. I do believe we will get a substantial rally soon but it will set up the easiest short opportunity in years as we head toward 10000 on the DOW and sub 1000 on the S&P, we will see soon enough.
For Wednesday I hope we get a deep enough sell off to buy I personally dont think the bulls are ready to give up totally but that time is near my friends. If we do gap down and selling increases and we don't reverse the gap then my friends I think we will test the recent lows before trying to form a bottom.
I think the brokers and banks in this environment should not be bought, they should be shorted as I think housing will more than likely get worse. GS and LEH are my two top shorts in the brokers with BAC and FNM being my shorts on the mortgage side. Watch for BIDU which I recommended last week for a long play for the week that got over $50+ profit for some downside from here. I think it will dip below $200 within 6 months. FSLR also will be below $150 in the next 12 months too.
I am a bear totally at this point because I think we will have the worst year in the markets in years. I do believe we will get a substantial rally soon but it will set up the easiest short opportunity in years as we head toward 10000 on the DOW and sub 1000 on the S&P, we will see soon enough.
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