Monday, January 26, 2009

DoctorMad End of Day Charts…

Well TOS decided to dump my saved charts. Fortunately, all of my prophet charts were saved. That forced me to redraw my ES and ZB. Never a bad thing to do and I am one that thinks it is best to constantly be updating your battlefield map as more data comes in anyways.

Stocks. Close up of the ES. As you can see we are still well within the C wave channel [of wave 2]. Breaking that would be your first sign of weakness in the bull lines and shorting that break is probably the best play this week, or better yet, short the retest after it breaks. Once we spill out of that channel then the yellow lines come into play with 800 still being the key level for the bulls. My gut tells me that when/if we do break 800 it is going to be a fairly dramatic affair and you'll probably have to be in before it happens or you'll wind up chasing. With that in mind I'm going to continue to lean short and look to hedge long on a break north of today's high. Oh and obviously I'm front running with the pink channel [drawing it in before the larger channel breaks], but I like to get the possibilities up as soon as I see them.

Bonds. Sleeping like a baby short the bonds from that retest way the heck up there. The current down channel looks to still be in firm control. Staying short. I'm also front running what might be the larger overall (blue) momentum channel for this whole move down. Once we stop the decline we'll have another data point to figure in with that.

- DoctorMad