Tuesday, February 26, 2013

02/26/13 - remain long, ST target 1515

Markets made a new low today at 1485 then rallied back up to 1496 to knock on 1500's door once again.

I increased the long position by purchasing a couple lots today.  Once near 1485, and the other near the low 1490s.  My short term target is a revisit of the upper down channel which is ~1515.  From there, I think the bulls stall and we come back to test 1500.

Why I think this rally has legs...OBV is telling me we should be at a level very close to 1520s...not down here below 1500.  Secondly, CCIs are slowly turning up, but all remain oversold still.

On the Daily chart, the CCI 233 is at support of the trendline.  Additionally, 233 is still way above > 100 implying strength.  The trend is still strong.  I would only really consider the bearish options out there if that trendline broke.


I still believe that we ended wave 4 today and are in the process of completing a fifth wave that should terminate somewhere in the vicinity of 1530-1570.  The current target is 1560.  I am not sure if it gets truncated or if we extend to beyond 1570.  I think both scenarios are likely.

Note that I don't put much emphasis on EW because it can lead you down a bad path.  I use it more to give myself a better idea of what the possibilities are out there.  In the end, trading is just a matter of managing probabilities (aka risk).

ST target: up to 1515

MT target: up to 1560, possibly more into March, likely 1st week or 2nd week.  I will be looking to take off a significant portion of my long term holds

LT target: Entering late April, I am looking for a large decline to 1420-1440.  That's the time to go heavy short, not now in my opinion.

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