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Pastimes : The Philosophical Porch
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From: Rarebird2/12/2010 10:39:05 AM
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Transcendental Market Truths (Fragments):

The Market:

As of yesterday's close, market had now retraced about 3/8th of its total decline. That puts this retracement in the normal range of 3/8th to 5/8th of the preceding leg down.

Initially, the market looked at the bailout as a positive for the Euro. But, that was never correct and it does appear that cooler heads are prevailing. The bailout is a negative for the Euro and that's why I added to my short position in the Euro. The market can't have it both ways: added debt cannot be both bad for the dollar when the Fed prints money and good for the Euro when the ECB prints money. Finally, it seems the market is learning its lesson when it comes to this fact.

Many of the index volume oscillators were rallying up close to their zero lines as of the close yesterday. If the correction is to continue - and I think it will continue into late February/early March - that zero line could very well be the resistance which turns the market back down. The turn down could come at any time, so it's a good time to pay attention because the trend is definitely still down despite the bounce I've seen in stocks.

Dow Industrials:

The Dow Industrials could be heading for a trendline test and a gap fill in the 10,198-10,248 price area basis the March 2010 Dow Industrials' mini-contract.

It's something to watch for since, if it happens, it could exhaust the bulls and reverse the trend down in a big hurry.

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