Monday, June 21, 2010

Carbon Copy

I'm sort of laughing because this Monday is as of 3:15 PM a carbon copy of last Monday only with a slightly larger range.  In theory these late day reversals should be negative but as I wrote a week ago (in the comments section) to a reader who asked if that day selloff "meant anything" those rules don't apply when you have premarket magic to make the previous day's bad technical action go away. :)  Lo and behold, by Tuesday premarket that ugly Monday close had been forgotten.

So in theory this is two Mondays in a row where we had a nasty reversal.  Last Tuesday we gapped up 0.8% in premarket (again on no news) and went on to have a 2%+ gain that pushed us right through the 200 day moving average and closed at the highs of the day.  I have no idea what happens tomorrow because all old rules mean nothing when someone with a fistful of bucks can make the market dance to its own tune in the 7 and 8 AM hours.

As I type we have fallen back below the 50 day moving average but still sit above the 200 day.  While a not so pleasant reversal, I wrote a few hours ago we are due for some price correction sometime this week.  Did not expect it in a "few hours".  The market did an awesome job of stopping out a bevy of my short positions right before it reversed... oh cruel stock market.

EDIT - just a reminder the simple moving average (200 day) has moved up from 1108 to just under 1111. Wax Off.


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