The 3/7/09 and 3/9/09 Gann turn dates worked perfectly. The next turn date is 3/17/09. We should expect this rally to continue into early next week. Current targets on the Dow are 7200+-, 7450+- and the 50dema currently around 7730 with 7450 the most probable target. As sharp as today's rally was, we may get there sooner than later, but a sharp pullback during this rally should also be expected.
The number one thing that traders should be watching out for here is a 5 wave impulse move into next week which could signify that March 9 was THE bottom of primary wave 1. At the moment it appears that we are in minor wave 4 of intermediate wave (5), but we should be cognizant of the fact that oftentimes fifth waves end abruptly and without warning.
Currently I have just a few short positions that I am trailing stops lower on using the 3 week highs. If I give back the profits on those I won't complain. I am holding them for wave 5 of (5) down.
I have been adding a few long positions over the last two weeks in case this does turn out to be the real deal. In particular, I went long the UYG at 1.53 last Thursday and JPM at 16.50 as well. I also took small long positions in some beaten down Nasdaq 100 stocks yesterday and today, which are short term trades for this rally only, such as WYNN, LOGI, JOYG. I have a couple of more orders still open. I will exit these at the 25 or 50 dema or by next Tuesday whichever comes first. WYNN was up nicely today.
Don't feel like you need to chase this rally. Even if it explodes upward there should be plenty of good names to buy. Check out QSII and EBS.
The SKF did it again. Yes, it is down 32% from its high on Friday in just two days once again pointing out the dangers of trading this ETF.
Good trading this week.
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