Thoughts and stories about my journey in the markets.
Saturday, January 29, 2011
Update: 8 to 10 new highs on weekly SP500
Well folks, the pattern is working perfectly the only question now is: will SP500 still make the 10th new weekly high or has a correction started?
Of course after Friday's sell-off (with the biggest trading volume of the year) we tend to think that the 9th new weekly high was the last one for now and we will see new lows next week, but would you bet ALL your money on that idea? I wouldn't!
I have learned the hard way that anything is possible in this business, who in his right mind can say for sure that we will not make the 10th new weekly high next week? Although it looks so much easier to think we will really go much lower next week...
But let's just have a look at the charts (look at your own charts as I'm not posting any today) and see what the possibilities are: we can say that *IF* it breaks 1270 on Monday we will probably see 1262 and then 1255-54.
BUT *IF* it does not break that number above we may go back up to 1285-88 (may be area for shorting) and then, if still strong, go to 1296-1300 and above that... surprise!! We would see the 10th new high where I would be looking to SHORT BIG from 1310 to 1320, if it'd go that far. (Have in mind ES has a difference of more or less minus 3 points from cash).
For the time being ALL we had was a one day sell-off with good volume, but everyone knows one day does not make a trend.
Have a great weekend and trade well this week.
Posted by @RenaTrader at 11:11 AM
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