Wednesday, May 14, 2008

Self fulfilling prophecy

So it was tame CPI coupled with NR7 (narrowing spread) to cause a break out of 645 to the up side. It was a race to 786 Fib and sold off afterwards. Two good trades, one long one short and was done for the day. It is risky to keep your position overnight. Now where do we go from here? The market was turned off multiple times from the Fib EMA 233 area. Price and volatility at opposite extremes again and that perhaps tiggered off the midday selling. However, the market has barely hooked onto the uptrend number of 648. As in the posted chart, if the market can rebound at the lower trend line of the up channel, there should be more to go till near term target of 655. But if it falls out of the channel, then the near term target will be 641. The upward sloping channel is bearish but it is heart breaking to see it breaking down with such a short channel. In any case, tomorrow's numbers are 650, 647 and 644. If the uptrend is to continue, it will have to close above 647.

2c

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