Wednesday, December 14, 2011

Where is the market going?

Sideways has been the story for a while now after that monster rally that started from the #2 green arrow in area 2.  Notice price never actually entered area 2.  If you look at the chart of SPY (same day) it looks like a failed breakdown, and they say "from failed moves comes fast moves".  

The SPY looks like HigherHighs and LowerLows are in store for a while, but I'll use the QQQ chart to show where I think we are headed.  


Overall, I think we are headed to area 4 - we may bounce or we may crash thru - so the options are to go long at the top of area 4 or short at the bottom (essentially a breakout) for a shorter term profit. If we beak area 4, look for a re-trace back to it, then short.  Once we find ourselves down at area 3 I'm all long right there.

So - in the near term, I'm looking for a bounce at area 4 back up to about 55.50, then down to area 2.  If we take off from area 4 we might have enough steam to punch thru area 3 as this area has been softened already.

Disclaimer

The information presented on this site is for educational and entertainment purposes only. This site contains no suggestions or instructions that you must follow, do your own research and due diligence before committing your cash to the markets. Your on your own.