Sunday, November 27, 2011

Looking For A Bounce

At the moment the short term trend remains down, but by several measures the market has become very oversold while sentiment remains stubbornly neutral.  These factors suggest that a sharp countertrend rally could occur at anytime, but that it will be followed by lower prices.

I will be looking for shorting opportunities in the coming days.  Only a reversal on increasing volume with a rise the % of stocks above the 50ma to above 60% would change that outlook.

At the same time, the most likely course is for a restest of the August/October lows followed by another attempt at the October highs rather than an immediate breakdown below the October August/October low.  Once that point is reached we can re-evaluate the potential future course.

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