Friday, February 20, 2009

Morning Update/ Market Thread 2/20

Good Morning,

Futures are down pretty hard again. We are sitting right on the bottom of the downtrend channels and these do look like bullish wedges that are close to termination. Yes, they could break beneath these wedges, but not likely for more than just a throwunder. While I say that, there is the precedent of last September where we spilled out of the wedge and began the October waterfall.

At this level, the S&P is getting very close to the pins on the November lows.

We basically fell to the next pivot point. It's at 768 on the SPX, and that's just about where we are.

I have been asked if today is a good day to get short... NO! If you are not already short, you missed that boat that sailed quite some time ago. But that's just me, I'll be taking profits here and waiting for the next entry. The only safe play short here would be to use the 768 pivot as a stop... if you get short, use that; or alternatively, if we break the bottom of the channel/wedge trendline, get short on the break BUT USE THAT TRENDLINE AS A STOP. It is downsloping and could work nicely if you catch it. BIG potential for a reversal... BE CAREFUL!

Here's a chart, DOW on the left, S&P on the right:


This will be it for the update, if I have time I'll do another one later...

Here's your banned cartoon of the day (LOL):