Reversal Day

The markets reversed strongly off the intraday lows today and the VLE closed up 6.4% above the 1/22/08 swing low. However, it is still well below the declining 25dema. No action is indicated at the present time except to hold short. As suggested previously, a countertrend short term trade could have and still can be made here. While we are presently concentrating on intermediate term trading systems, if you are looking to go long here, consider entering a limit order on the QQQQs around 42.50 to 43.00 and look to exit near the declining 25dema around 48.00.

In order for this system to reverse and go long, the VLE must now close above the 25dema and the 25dema must rise for two consecutive days.

While all of the emotional drama of the market crash is playing out in the media. It is nice to realize that there is nothing to do here except wait for a long signal. Relax and be patient. There may still be more downside to come, and regardless of the market prognosticators we can really only estimate potential outcomes.