Thursday, August 13, 2009

The battle continues...

The bears seem to wake up everytime the price gets to the 1015 area and then go to sleep as soon as it leaves. The bulls hold the line and push the market up whenever they can. You had to love how the big boys crushed the open and then turned it right around. The whipsaws seem to be increasing, which can be topping sign if we don't breakout to the upside on solid volume.

Where we stand now is more in the bullish camp. Of course, that is only because the price action appears to be heading to a higher high. However, there is still significant risk at these levels for the bulls. I have put together my three best counts.

The most bullish count would put us in a 3rd wave tomorrow and we would blow through overhead resistance with a solid up day. This should be recognizable from the start. A likely gap open possibly right at or above resistance with just a little bit of give during the first 10-15 min. Then it would be off to the races for the rest of the day.

The next bullish (relatively) count puts us in a double top situation. Price likely ends in the 1020 area. Should we gap above 1016 and immediately sell off, then I would lean toward this count. Of course this would only be bullish if you're holding longs overnight and sell at the open.

Immediately bearish is that we top somewhere between where we close and less than 1016 and we have a very rough down move tomorrow killing all of the bulls.

So there you have it. Tomorrow should show some solid volatility during the morning session. The trend will hopefully stick the whole day making day trades fairly straight forward. A break of 1004 would be bearish. 1000 more so and 992 VERY VERY bearish. Let's see what the market brings.


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