Velo- I have to disagree with what I think is your premise.
Correct me if I'm wrong, but your premise seems to be "we don't know what's going to happen"..
On one level, of course, that is always true. But I think the "educated guess" for a nice bounce is very strong here, and am a little surprised that you would dispute that (if I am reading you correctly).
First, the international markets HAVE bounced from the lows. Have they been huge bounces? No. But 2-3% (or more) bounces are certainly playable, and that is what I am talking about here (at a minimum) for the U.S. markets...I am looking for a tradeable, high probability bounce.
Secondly, let's say this event never occurred, and we opened down 5% on some other news. Everyone would either (then) say, "either we are crashing, or we should get some sort of bounce..even corrective". Now, I think playing a crash (if we open on Friday) is a low probability event. If there was ever a reason for massive intervention, this is it. Notice, in my arguments, I'm not saying we can't/won't go lower later in month or next month. I am talking very immediate here. Do you realize how devastating a crash on Friday would be? Even from political/security reasons, there would be every effort to prevent it. In essence, if we crash on Friday, one would be saying the PPT can not be effective on any particular day, and never will again....even as much as 2-3%! That's damn strong, and a tough argument to make.
I do agree, the argument for further up next week is less strong, although still there IMO.....
As traders, we are playing the odds. I don't know what better odds there could be for a decent bounce on Friday (IF we open for trading). Timing the morning's bottom will be the tricky part, IMO, if one is trying to catch it absolute.
Finally, again, this scenario changes/moderates a little (not a lot) if we don't open until Monday. I'd expect the bounce to be less effective/high. Also, this is all said with the expectation that we'll open down 5-6% (at least) when we do open. |
