Sunday, July 5, 2009

For Monday July 6th

I will probably be visiting with family most of the day tomorrow and Tuesday, so I don't know the likelihood of any new blog trade even if there is a good set-up. But here's my take from seeing some historical stats and the technical set-up......

If the market opens with a gap up tomorrow, that may suggest strength the rest of the day, with the best short-term opportunity probably being a gap up followed by weakness undercutting Thursday's low, followed by an intraday reversal type set-up to go long. I am not recommending this at this point, but that could be a decent set-up.

If the market opens with a gap down after such a big, broad-based downer last session, that has historically suggested that the selling has not run its course yet, and I wouldn't be very willing to take much less than a "perfect" bullish set-up. The S&P short-term model is oversold already, and the market is above support, so the set-up is decent. But with a fairly obvious shifting of trend to the downside, I may not even bother trying to catch a bullish trade.

The fact that the high of the left "shoulder" was exceeded last week on the S&P makes me less expectant of a secondary bounce here before breaking the "neckline" of the head and shoulders type pattern that is forming. For the ideal symmetry of the pattern, it would still need to bounce again, but it may not be worth trying to catch for blog trading purposes. I'll have to see what it looks like, and if I have enough time to devote to sizing things up the next day or two.


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