Tuesday, July 20, 2010

Not looking so good any more...

...with today's reversal off of the gap down comes the high probability of a revised count and potentially a more bullish outlook. I really hate when I put all that hard work in and the market is looking to take it away (and it hasn't yet), but price action is king.

So here is the 5 min chart with a potential bullish count. Clearly we have what appears to be an impulsive move coming off today's low. But if this is just another sucker's rally, then we should see a big time reversal tomorrow that takes out the 5 min 34 SMA and eventually closes back below 1070. Otherwise, Minor 2 was not done (or some count even more bullish).

The hourly chart shows the apparent strength of the move (short covering rally), but how price interacts with 8 SMA once it drops will be telling how much strength is really there. That is where I'll make the decision to possibly exit short positions.
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