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Sunday, May 2, 2010

Low close is bullish I say.

FAS and the rest of the markets opened down and stayed down most of the day giving FAZ the cloud walk this time.  It was not a negative Dino's KOD on FAS.  That is a positive.  I got a signal to go short at 106.62 and FAS rallied and gave a nice place to short at 107.5 from that point it was down  hill not very steep though and eventually closed at 100.9 and a low of 100.3.  I closed out at 101.5 for I did not want to take any short home.  I have 2 small trend lines on the charts I will be watching those.  Clearly there is nothing positive to see on the charts.  Fas is below the DOMA and  none of the indicators RSI, MACD or Williams % are positive.  MY DMRM is at 103.53 that is what I will be trading on Monday.I have a Gann with
angles on the right for SPX on the daily.  There is a major assumption here that 1044.5 is a bottom and and at a assumed rate of 3.278 per day we topped out at 1219.8.  We can then get   2x1, 1x1, and 1x2 lines. I added the the 2x3 line it is not part of Gann definitions but I saw it being the bounce point at many instances.  Based on that there is good probability that 1170 would hold if we get there. I do not think we are going that far.  From my perspective we should have a good rally from here starting as early as tomorrow.
On the left is a cut out of excel when spx closes at the low of day within 50 cents.  10/19/2007 was a close at 1500.6  The subsequent highest point was reached on 10/31/2007 at 1552.  Except for one occasion (in red) all other closes at the low have yielded very good upside.  that is 20 out of 21 times we have excellent gains. This was during the height of declines.  In the ensuing rally since 3/6/2009 we have had 5 instances of low close and they were all very good rally points.  My forecast of a rally was based on this real data.  I am bullish and would stay that way.  I am anxiously waiting to go long.

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