Thursday, February 11, 2010

Rally May Be Complete

The pattern that developed this morning makes a very nice running triangle for wave B. So far today, the high for the Qs is 43.78 which is just 0.04 away from the point where wave C of (B) would equal wave A of (B), assuming this morning's low is wave [e] of a running triangle. Volume is also running light today. I am now half short the Qs against the January high. I will add to the position once the downtrend resumes. If this analysis is correct, we should see some selling into the close today, more selling tomorrow, a small rally on Tuesday and then a resumption of the downtrend by Wednesday.

There is always the danger that this (B) wave rally will develop into a larger combination, but since it can count complete, I am willing to take the risk.

No comments: