Monday, July 11, 2011

7/8 - wait and see

Buy?
- market closed well off its lows..
- trend is still up...nothing broken...today just shows us going sideways
- despite super bad jobs numbers, we didn't open as low as futures expected and definitely did not close as low as expected either

Side??
- as we are sidetrending in 30min charts of VIX and XLF
- bulls still are in charge so we should not fall much...and bulls need to take some profits, so instead of falling (because bears are too weak), sidetrend might be the most likely thing
- dollar and FXE are still in a trading range

Sell??
- market is super overbought in NYMO and PUT/CALL ratio
- financials keep remaining the laggard
- NDX is right at prior high and other indexes are getting close to it

Verdict?
- if market cannot continue its selling on monday, but instead makes a strong bullish move or reversal, go long
- if market does drop more on monday, great time to short any confirmed setups
- stay patient as the next move (if its to the short side) can be huge!

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