Monday, February 23, 2009

Stocks: Down side range expansion continues--good trade opportunity

The downside range expansion continues and all systems indicate that market is going lower. You will notice the spike down to the 741 area in November. Will history repeat itself? I think to some extent it will. Traders should be on their toes for any spike below 741 overnight or early Tuesday morning.

I doubt we will see the monster rally we saw in November. But, looks good for a nice fat trade.

Complacent longs are still in the market and so far they have not capitulated. Sometime soon, very soon they are going to cry "Uncle".
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Any price action below 741 on Tuesday should show excellent resilience. The market should hold downside thrusts very well below 737.

Under 740 tomorrow favors quick, long side trades. If the market can muster a two day rally, it should be ready to start down with a vengeance. The market rarely closed lower 7 days in a row. These are rare times, however

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