Tuesday, June 15, 2010

The Three may be on the other side.

First let me apologize for not writing my blog on Friday and Monday.  I was a little busy with a few personal things.  Friday was a DKOD positive on FAS and it closed on Fri at 22.82 and the high on Monday was 23.66 a handsome pay.  Next on Monday SPX closed at the low of day and today it paid of nicely.  FAS after making the low of the day at 22.61 early at 9.40 never looked back and closed only a dime from the high of the day of 24.16 at 24.06.  
We have now had 4 days of HH and HL.  That is very bullish.  This is opex week and anything can happen.  However this seems like a strong move.  The chart on the left is envelope.  On previous attempts FAS was returned back at the middle DOMA 77 line.  This is the first time since FAS's top in April FAS is approaching the top line of the envelope.  It is my belief that the top will be penetrated and FAS would come back inside the envelope after that.  When FAS comes back in I will seriously consider shorting. 
The chart on right is my D2PL.  I treat the down ward sloping lines as penetration points and not as resistance points. 
When FAS moves above these lines it is a buy point  because I do not know in advance where these points are and how bad or a small a decline it is going to be at these points. Secondly I would be be speculating a lot to make one of these highs a top.  As you can see FAS has made five of these.  When FAS moves higher than a previous high a HH and an up trend is created and accordingly going long is going with the trend. 
In terms of EW  1040 to 1105 was a (1 or a) to 1042 was a (2 or b) and we may now be in a (3 or c) from 1042 taking SPX to 1145 - 1150. 
SPX and FAS and particularly TNA may take a breather and give me an opportunity to go long.  I am looking forward to it.  I am bullish.

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