I was stopped out of my last short position today, so I am now partially long. I will not look to short the current correction as I think the risk is to the upside. Rather, I will be looking to add additional 1/2 positions in index ETFs as the pullback progresses and will complete those positions on a breakout above this week's highs. Of course, this will require waiting through some drawdown this coming week, but if you take a look at what happened in gold this week, I think it paints a good picture of what will be coming in the stock indexes.
So many people have declared that the rally in gold is over, and by Wednesday noon, I was almost ready to agree with them, but gold went on a tear squeezing the bears. We could see a similar move in the stock indexes once this pullback is over. I expect at least one hard shakeout day to trap the bears. Only a sustained move below the March lows or an IBD "Market In Correction" call would alter my view at this point.
1 comment:
From today (3/20): "...on a breakout above this week's highs"
From yesterday (3/19): "The expected pullback appears to have begun today. The high in the indexes occurred yesterday one day after the Gann turn date. The next turn date is on March 27, so a one week pullback seems to be the most probably outcome. Of course, the market could consolidate sideways, it doesn't have to be a sharp correction."
IF a NH for the rally oocurs this week before the 27th, it would then be a "b" wave NH & part of the consolidation ? Is that correct ??
Regards,
dave
Post a Comment