Thursday, October 10, 2013

10/10/13: Small short at EOD, start of bullish wave

I closed out a bunch of longs today in the short term trading account and started a small short at EOD.  It looks like a practically complete 5 waves up so I'm taking a stab at a possible wave 2 unfolding.

Given the magnitude of this wave (wow, I can't quite remember a bullish move like today start to finish), I feel like a small correction is worth a small short.  Even taking 38% of 2+% move is not a bad call to wager especially when there are small negative divergences forming.

Nevertheless, this small short is very short term, and I'm looking to get bigger long on a decent pullback.

If we are in a bigger wave B then if this first leg of wave B was 2+% then once can expect the third leg to be ~2+% as well.  This would put us either at a double top or a new high.  I'm hoping for new high but taking this a day at a time.

We have negative divs on the short term CCI and the short term aroon oscilator.  There is also the possibility of a negative reversal on the medium term CCI.  However, given the daily chart shows this as a massive bullish belt hold, I am inclined to believe that given what the various indicators are suggesting, it's a very short term pullback and then another run up.

I'm still in the camp looking for a new 52 week high.

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