Tuesday, February 24, 2009

How Do You Like Your Bottoms?

After seeing a small rally early Monday morning the market just grinded lower all day and closed near the lows of the day around the low 740s. We are essentially at the Novermber closing lows in the SPX now. It looks like we will continue lower but if we do then I think it will not be the same kind of panic selling from the fall of 08. After all how many people are still left to sell?

On the other side of this you can make a case for a double bottom at this area because it seems to me like everyone is expecting this big scary selloff once we break the November lows. I mean I just cannot stop hearing it on CNBC. This tells me that just perhaps the market might do something the crowd is not expecting. We shall see but don't bet all your chips on a selloff.

The currencies are at an interesting area too. The Euro is back down to November lows and should see the same move the SPX makes. The Yen is rolling over as I type and that dollar/yen pair is finally back over 95 which means the rally is alive and I bet it goes to 100 by the spring time! Gold will probably pull back a bit this week after the amazing up month it has had. I think gold in the mid 900s is a buy. Oil is simply not done goin down imo so don't try to catch it. Overall the next month on oil could see it retest the mid 30s and if that fails watch for 29-30.

For Tuesday, the pivot is at 754. We have rallied into the 750s after hours and I see a ambush short at 759.50 if we get there. The pivot point is the line in the sand for the day's bias but if we hold above it then I would look for weakness into that 760 level. If we get over that area then we could see a nice short covering into the 780s. Below this 754 pivot and there will be selling and probably some hardcore selling. Trade safe.

No comments: