Yesterday I said I would be bullish above 960 and today that was just about the top in the morning so it proved to be tough resistance. I would remain on the short side or bearishly tilted in my trading until the market showed us some sign of strength in the 30 and 60 min charts. If we break the 900 level this week it could quickly lead to selling down to the 880s and further perhaps. I think really anything can happen since we should see some light volume between now and Thursday but I'm leaning a bit more to the downside here. There is simply very little reason to buy and no leadership out of any sector so why go long? Its just as easy to make money on the downside. Just use your stops and trade safe!
Monday, November 10, 2008
How Do You Like Your Gaps?
Filled or Runaway? Well, the fact is that on the major averages I think its something like 90% of morning gaps (up or down) are usually filled at some point. Not always in the same day but still the point is that you should always be cautious if you're buying into a gap up or selling into a gap down. The market will usually tell you within the first hour or two what you should do concerning the gap. Today it wasted no time telling us that it was going to be filled and then some. The selling came in fast and furious after the open and every bounce from there was a good selling opportunity. Aside from the last hour bounce this was just an ugly day as we came all the way down to 906. Whenever a market gaps up, reverses down, and closes NEAR the lows it doesnt get me too bullish.