Monday, December 1, 2008

Update Heading Into the Close

The S&P and /ES are heading into the 830 area with the down now down over 500 points!

This move is on a large magnitude and the volume, although larger than the past couple of days of up movement is not REALLY that strong. This move looks a little impulsive and I’ll note that most of the moves off the top tend to start off a little weak on volume but the trend is that the volume picks up as the move down progresses.

I have been pretty short from about the 850 area and plan on taking partial profits into the close as my very short term indicators are now oversold. I think we need to see more decline to get beneath the 8,300 area or the into the 820 S&P area before this decline looks more than just technical, which a 500 point decline does – look more than just technical. There’s support at 830, but we could see 820ish by the close, and that would align with my earlier morning flag target.

This is a VERY volatile market and the problem with big position size here is that you don’t know you’re right or wrong until a new high or low is established! But with 1,500 point swings, you have to be patient and manage your cash well. I won’t be a hero with small position size and taking profits often, but I won’t be a zero either. There’s a time and place for larger more aggressive bets and I’ll let you know when I think that is.

More after the close,