Tom,
As I indicated yesterday, I am holding firm still with my contrarian position that the market will return to normal trading form very soon and that the market will not have to return to the 6950-7000 range to return to technical normality and to start its movement back up.
Even though the market dipped more than I expected yesterday (50-75 points), I still noticed technical signals that normality is starting to return.
The technicals are now in the lower mid-range with only a slight bias to the downside still. I realize that the market this morning was up strong and has retraced off the hights to being up 33 points on the DOW. If the DOW remains up for the day, depending how much, it may change the direction of the bias.
I feel that the downside bottom is in the 7250-7300 range. At that time the market per my technical system will be oversold. Also I am not saying that it will get that low either just yet - that will be determined on a day by day basis, as the same way many traders use support lines being broken to determine such.
I have also noticed thru my technicals that the downward pressure is losing strength.
It is too early to tell, but I am wondering if we are starting to TRIANGULARLY OSCILLATE (PENDENT FORMATION). If that does happen then there will be a strong surge when/after the TRIANGLE narrows. If a TRIANGLE develops in the 6250-6500 range, I would presume that the surge upwards would start in the 6325-6425 range. As for the lenght of the TRIANGLE I would feel comfortable with about 7 trading days minimum before the surge. One last thing about a TRIANGLE is that the surge can be in either direction, but at this time I am taking the upside position. Again, it is too early to determine if the TRIANGLE will form.
If the market gets to the 3250-3300 range, I will be loading up with calls at that time. |
