OT. If the fine folks who use this thread consider this post to be in-appropriate for this thread, please let me know.
Anyway this is prompted by reading the post from kdavy who sold a bunch of partial positions at a loss.
The market, and especially NASDAQ reversed to the upside today, after a 170 point drop over nine days. Todays rise was 31 points, which is a 17% retrace. Thinking about tomorrow, what is a higher probability outcome for the nasdaq:
1- downward reversal
or
2- continuation of rally ?
Since I can't predict the future, I can look at the previous 9-day drop which reduced the nasdaq by 200 pts in January. Its reversal was a two day rise of 80 pts. Which is 40%.
In fact, since last October, every long string of down days has been followed by at least a two day rally that retraced 40% or more.
As evidence, please look at the drop from mid March to mid April. 200 points. Followed by 3 up days that retraced 100+ pts.
Of course there is always a first time for anything. But I think the odds are that we'll get at least another 30 to 50 nas points up before the rally fizzles out.
Anyway, that's why I sold so little today. And in defiance of fate, I immediately spent it all to buy 1k sh of my favorite stock, Western Digital @6.12.
Good luck to all. Oddly, we're not seeing any posts from shorts. Did they get religion, or what ?
Sarmad |
