ST trading:
We are close enough to the December 2000 low, that a bounce around here would count as a double bottom. New lows, however, means that everything since December 2000 was just a bear rally, one immense head-fake.
40 was very strong support for a long, long time. Then, yesterday, we gapped down through 40. At some point in the next few days, this decline will end, and we will rally. It is crucially important that that rally gets us over 40. If we go to 40 and stall, I would advise longs to get out, go to cash, or at the least hedge by selling covered calls, or buying puts. If we stall at 40, the chart will be saying that 40 is going to be resistance, as strong and as long as it was support.
The next few days are very important. |
