The madness continued today as we bounced again. We had a violent bounce on Tuesday, only to get mauled yesterday. Today we soared higher yet again, as the bulls aggressively charged the hill. Today’s action seemed real, but we didn’t go out on the absolute highs like we did on Tuesday. But I digress and nitpick.
So what now? I have been posting fairly regularly if you have noticed, as I am trying to watch the play by play on this crazy market. If you have been reading, you know that I have been saying that a rally was coming (duhh, so what), but I also said that a good rally will allow shorts to set up. Some already are. Charts are still beyond broken and these 500 up and 500 down days don’t make it any easier.
Rumors of French banks having counter party risk made the rounds yesterday and talk of a “no short” rule in Spain and Italy took root today. Keep in mind the SEC implemented the same rule when we were crashing in 2008 and it didn’t help. We went significantly lower. Frankly, it was laughable. I don’t really follow individual stocks in Europe other than the country ETF’s like EWG, EWP, EWI and EWQ, so I cant elaborate too much on the topic.
Europe still has big issues and the streets of London look like the battle of Bataan. None of this matters though when the market is oversold. This rally, ( a follow through day to the upside is much needed, we haven’t had one yet) could take us to the 1200 level and maybe even the 1250 level assuming nothing blows up long the way that we haven’t anticipated. I traded triple long etf’s today, still avoiding individual stocks for now.
Stay tuned, trade em’ smart and use stops or don’t play in this sandbox. As I said the other night, this trading action is just awesome and money will be made both ways for the foreseeable future.
For performance email: [email protected]