Today was just a negative day all around ... a lot of cracking in pavement as the weight of the market fell on itself. The action over the last two days reminded me of what I said after our big decline over a month ago ... which is ... remember the man that fell off a building ... he is not going to get right back up on his feet and starting running again.
The market clearly can't make up its' mind which way it wants to go in the long term, and clearly all market participants (that are trying to play this market) are just enjoying (or suffering through) the short term bounces. It is a very short term market and holding overnight can be perilous. I am still holding some long positions from a late last week, but havent added to my positions and in fact, started shorting a small amount today.
I honestly think there is money to be made on both sides of the market if you want to watch your screen all day long ... i think you could buy short and long at the same moment ... and sell both at a 2% profit within 3 days ... just crazy. As stated earlier, this is not a market for long term investors, just too scary.
Next week will be very important for the market to make a decision. we either will need to break through a few critical levels on the downside, or the opposite.
the optimistic road ...
Using IWM as a guide (Russell 2000 ETF), if wecan stay above $66.00 a share and then move up to break the previous most recent high at 71.30, we stand a good chance of moving higher over the coming weeks
the pessimistic path ...
Using IWM as a guide (Russell 2000 ETF), if we break below $66.00 and more importantly $64.80 ... then I would expect the market to do a small bounce up to around $68.00 creating a new lower high from the previous high ... and then fall hard to a new low ... probably as far as $60.00.
so, in the meantime we enjoy the quiet before the storm ... another weekend! But I expect some important decisions to be made before Wednesday of this coming week.
Have a great few days of peace ...
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