Buy and Sell Signals, and Other Market Perspectives Message Board

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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 662.72

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Nov 19 4:00 PM EST

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From: ggersh	7/15/2010 3:40:15 PM
	1 Recommendation Read Replies (2) of 219001

FWIW The shorter term structure of the rally in equities over the last week still looks like it could put up one higher high. The daily chart that I’ve enclosed shows a couple other situations that are probably much more important. 1st the bearish declining trend line off the 5/13 and the 6/21 highs has contained the rally the last 2 evenings, and 2nd and perhaps the most important situation is that 7 trading days have passed since the 50 and 200 day exponential moving averages have bearishly crossed. Recall the previous e-mail where I noticed that the last bearish moving average cross back in 2007 resulted in a 6-7 day rally right after that cross, before the bearish equity sell off resumed. I would be out of long positions at this point and perhaps have a few cheap puts on hand right now, and if we can rally a bit tomorrow I would look for the typical option expiry Friday rally were I’m planning on getting a bit more aggressively short.

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