Market Currents
Stocks rebound from sizable early losses as the word "optimistic" escapes John Boehner's lips...
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Wednesday, November 28, 2012, 10:48 AM ETStocks rebound from sizable early losses as the word "optimistic" escapes John Boehner's lips during a press briefing. The House Speaker says he's willing to put revenues on the table if they can be accompanied by spending cuts. The other side: Erskine Bowles tells the WSJ the WH is flexible on the level of top tax rates. S&P 500 -0.2%.
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SHOW ME THE BEEF!
In short, we borrow 4% GDP to purchase 3.1% in actual GDP.
Since when did climbing out of a hole become falling off a cliff?
This particular action raised several possibilities for the bulls by going deep down but preventing a collapse on the Intraday Charts. Specifically similar to what happened on the Weekly Chart in August to October 2011 when SnP500 went deep down but failed to collapse.
Let's rehearse what happened in Aug to Oct 2011:
- SnP500 late 2011: http://bit.ly/QMjfMi
- SnP500 Weekly NOW: http://bit.ly/SerzkW
That's one way a Simple 1-2-3-4-5 rally can morph into a potential Spiral Meltup or even a potential Complex Spiral Meltup Rally.
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What happened on the Intraday Charts TODAY is similar to what happened on the Weekly Chart of Aug to Sept 2011 - only that it is on the Minute Degree instead on the Intermediate Degree that happened on the Weekly Chart:
- SnP500 30min Chart: http://bit.ly/QMjhnk
The last time a Potential Complex Spiral Meltup on Intraday Chart formed was in early Sept 2010 (illustrated on ES 240min chart of Sept 8 or 9 Instablog if my memory serves me right) that resulted in a strong rally from the July 1, 2010 bottom to Feb 18, 2012 top. This one is much smaller in size and scope - so don't bet your nest eggs if a strong rally actually happens in the next several days to a few weeks time. There are still too many possible headline risks so using Trailing Stops on current long positions is mandatory if not necessary to prevent possible large trading losses if the above Scenario fails and a Spiral Meltdown happens instead.
I'll be waiting for a possible formation of a Continuation Inverted Head and Shoulders at the top of the Intraday Range to perhaps add more SSO long positions.
The charts show you the prices. The prices dictate profit and loss. The transactions represent the willingness of the market participants to buy or sell at that level. That is all you need.