Weird morning so far, eh? All I heard about, over and over again this weekend, was the big Time Warner (TWX) buyout, with a purchase price of $106 per share. Right now it’s trading at 87.48, down about 2.5% from Friday. Umm, I don’t even care enough to explore why, but it hardly sounds like an orgy of excitement to me.
What’s crucial to my eyes is for the Major Market Index to retain its broken trendline and stay beneath the gap I’ve highlighted below.
I offer this up as a superb example of “filling the gap”. GOGO rallied mightily from its lows, but the moment the gap was closed (with literally two pennies to spare), it reversed hard.
I like ’em both – – the closer they get to the gap, the safer they are as shorts.
It’s more than a little puzzling to me that interest rates are dropping, but financials are strengthening – – – of course, in this market, it seems everything is required to go up, logic be damned, so who am I to argue? In any case, the horizontal I’ve highlighted below is Custer’s Land Stand for the important broker/dealer index.