Well! We haven't seen one of those in a while! And what I mean by that is………..a rally without some bizarre exogenous force behind it. The market simply went up. There wasn't any giant new U.S. bailout. There wasn't a dollar-for-dollar tax credit for those buying stock. The market simply. Went. Up.
It was a wash for me, because I've got a bunch o' longs and a bunch o' shorts. So it was actually pretty boring. The not-so-boring question is what's going to happen the rest of this week. One camp says we bottomed last week, and today is simply the shape of things to come. Another camp says we're going to bottom soon, but not before a cataclysmic, 2000-point plunge on the Dow. Quite a contrast of views! The $SPX, shown below in daily form, shows we in day #9 of utter uncertainty:
There are reasons to believe the big rally today was simply another shorting opportunity. Look at the DIA, which simply rallied to a Fibonacci level (almost to the penny). We are still well beneath the major broken support line.
The $COMPQ is less clear. On one hand, like the DIA, we've rallied to a retracement line. On the other, there's not a heck of a lot holding this back from pushing to the next line higher, which is over 200 points away.
Whether or not the famed symmetrical triangle is still intact depends on how you draw it. The smallish triangle, whose upper line roughly matched the lower line with respect to time, was clearly broken today. You could use an alternate representation like the one below to see if the market confines itself thus:
As for my old buddy the $UTIL, I bought some SDP today, since – – best case – – I don't think the $UTIL is going to be able to push past the retracement at about 414. This is a very substantial topping pattern.
Earlier today I suggested buying DUG and shorting OIH. Turns out that was premature. I lost a few thousands on my DUG trade (which got stopped out, obviously). I still like the looks of an OIH short trade, so I'll be watching it closely Tuesday. Judging from the $OIX, I don't think this particular index will have an easy time getting above about $625.
Please take a good look at the right column – – scroll up and down. There are all kinds of new goodies in there. As always, there are the watch lists, which you can scrutinize for ideas. There's a new way to sign up for daily emails to get a briefing on Slope posts. You can also easily get Slope in an RSS feeder now. And so on.
I have been completely out of the comments section all day, but I'll try to get in there to see what ideas people are bandying about. I'm not sure if I'll do a substantive post later; like I said, today felt pretty quiet, which doesn't lend itself to doing a dozen posts like I sometimes do. If nothing else, I'll see you folks in the morning!
