Thursday, November 13, 2008
You Ain't Seen Nothin' Yet
What the hell was that? Lol, well just like I said 865 breakout gave the market one of the biggest short squeezes we have ever seen! The ES futures literally had like a 95 point range on the day. Just spectacular. The shorts got hung by the neck today in the last 3 hours as the market hit a low of 816.75 in true capitulatory fashion. Then recovered all the way back to breakeven, and virtually without pause, rocketed higher into the closing bell on huge volume (4.2 mil on ES, and 753 mil on SPY) to close around 910. Absolutely incredible. It was almost like you could feel it mounting as it rose and you knew it was just a melt up that would not end till they rang that bell.
I think this sets us up for at least a few days of continuation. Why dat? Simply because we had a classic textbook example of an outside day pattern today on pretty much everything! Outside day is a very bullish pattern that says a continuation of a few days is very likely. You ain't seen nothin yet!
Ok lets not fall in love with the upside here traders but when I see a rally like this with volume like this, I see several days or even weeks of continuation buying. Until this signal reverses or changes I will be bullish because this was a very important POSSIBLE inflection point. I am not calling an end to the bear market at all! But I am saying we are probably going to rally in the short term and why not make a few bucks to the upside right? If you think you missed the move today, just patiently approach the next few days with a buy the dip mentality and dont get too emotional out there. Basically throw a dart at the board and buy it on the dip. I like AAPL, INTC, AA, DRYS, as high beta plays in the next few days and in order of least risk.