I am going to name the above chart “Wedgy” as we have discussed it every night. As yo can see, we are back to just about where we started last Monday. As you know, there can be much action within a trading range which in this case is our wedgy. If we break this wedge, 1100-1120 could be back in play.
Bernanke did nothing to save the market today. It’s sad that a market relies so much on quantitative easing for sustenance, when the government removes the pacifier this is what can happen. I was short yesterday not because I thought Bernanke wasn’t going to save the day, I went short because the only stock that has been acting well is AAPL. If you remember Sunday’s video I said most sectors weren’t participating in the rally besides select technology (AAPL & AMZN) and semiconductors. I speak of XLB, XME, KOL, SLX and the list goes on.
Tomorrow is another day and my guess is that we could have a weaker open as Asia will play catch and be a seller of equities. Don’t forget Europe is still front page news too and that story seems to go from bead to worse. I see a million shortable charts now, but a bounce could be coming over the next day or two and I don’t want to get caught leaning to short. If however the bottom drops out of this market, there will be huge opportunity for us going forward on the short side.
See the P&L as I have adjusted everything to reflect today’s action. Hope you had a great day and have a great night.