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Thursday, March 25, 2010

Not All Reversals are created equal

As noted yesterday, today was an outside day. Mr. market did not heed to my preferences. It went up and then came down. It would have maintained the trend without any question had it gone the other way around. First down then up. None the less. Few things to note It was A reversal not THE KEY reversal. What was missing was the high open or reaching the high very early in the morning. IMO what happened was when the market hit new high the window dressing started and money mangers who wanted to cash in and lock in some profits started selling which tanked the markets. I am not ready to call it a total trend change YET. Caution flag has been raised. My DMRR is at 1158 on the spx. My DOMA 86 on daily is 1116. I will lighten up my longs at or below 1158.

There is always a trading side for the short term. Otherwise what is the fun in getting up early in the morning and starring at the computer screen. BTW we have an excellent forum at CIL you should check it out. This morning I was adamantly bullish looking for may be 200+ day. However that was my PREFERENCE I have trained my self to live with what ever market throws at us. As soon as TNA went thru 15Min DOMA 67 I went short and I carried it home.
Looks like we are in some kind of 3. I will be watching other indicators. STO, RSI and MACD to time the sell tomorrow. I do not like to carry any short term situation trades home for the weekend. I also do not believe the uptrend game is over YET. The boys haven't come to buy with boatload of money with very high TRIN and big Adv/Dec ratios.

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