Friday, April 15, 2011

Next Week Is Truly Important For The Bulls

Well the elliott wave bears are ready for primary wave 3 down.  To them the rally over the last two days is wave c of an upward expanded flat that will lead to major selling next week.  But the fact is that sentiment as measured by the PPO of the equity only put call ratio has fallen, which doesn't support this view.  It seems more likely that the current rally is the very early stage of wave [iii] up, or at least wave a of (b) of [ii].  We will know very soon next week which way it will be.

You may not put much stock in this sort of thing, but the rally off the March low started fading around the new moon on April 3.  The full moon is Sunday April 17.  This will either coincide with a continuation of the upside reversal or a downside acceleration.  I tend to think the former rather than the latter.

As I noted an extreme reading on the McClellan Oscillator on Tuesday, I began to look for some short term trading opportunities.  VPHM showed up as a small cap leader on an IBD screen.  Note how it had pulled back after a strong breakout in March.  The moving averages remained strong.  I entered an order to go long on a 3 day high at 19.95 which was filled yesterday.  I exited the position today at 22.00 for a gain of 10.3%. 3 ATRs would have been 21.60, but when I saw the strong movement I raised my target to 22.00.

Have a great weekend.  Next week should be interesting.

No comments: