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This market has been quite hectic, we have seen a classic whip saw example today we opened lower got in a good decent rally saw 1336 area were unable to break that 1340-42 resistance and pulled back to 1308 in a spike down to run stops. It was pits at their best, they ran the stops both ways, first got the shorts running for the cover with a quick rally, than stopped out the longs at 1328 break and took the market through 1320 the support which we thought should hold to 1308, nearly all the major stops were rung on the way down and we are right back up. This is what is noise now how one can explain this on any chart, a chart does shows a drop potential but a spike like this can out right kill anyone. It is here that lessons I work on come handy, my DOT 545 has been filled but for me this whole move was neutral I was carefully watching that BKX 790 area, DOT 542 and SOX 510 we did go thru somw these but without conviction, and the move back up is quite significant, I would think that with rallies in SUNW on a day like this the SPU could not be contained down, not that one stock can hold the marekt this market is going down only if NDX breaks big time from here, or DOT breaks below 525 to 453 low and onwards to 350, it is those areas where panic selling will set in. Right now I have some long calls initiated on individual stocks of internets at the 545 area and will hedge them with 700 DOT calls that will give me a decent 40% cover of the premiums, from here I don't see a short trade unless NDX takes out 2285 that is a long way but from 1318 break to 1302 we can trade these interim points.. I am seeing that if SOX DOT stand up to this selling htis market will move higher within two sessions, for marekt to break DOT needs a double close below today's low and SOX same, today's lows are points where the next stage of selling will develop otherwise just enjoy the game and look at the interpretations here, this is a high powered game, since morning the die was cast to hit 1320 but before 1340.. below 1320 I accept the pits had no control, they must have winked at each other saw some lucrative short orders and ran them through, abd i am sure they ran them through both side, first made them short and than stopped them out on the way up. This is no TA game this noise and those who are not aware of it will know it soon, for a short term investor today was a great day to ride the resistance and supports but for long term investor this is one of those days you will forget.. Look for that break of BKX DOT SOX and PSE below 600 otherwise if it is not coming the market is not going down. wjatever the charts may say the market will depend on key indexes watch out for them very closely and react to these indexes when they break otherwise find some small poaitions and trade with out of the money calls with little premiums interday declines and inclines .. Love and regards Ike |
