2 Scenarios I’m Looking For
Some
dental work combined with painkillers is forcing me to keep it short today.
Let me first say that the move in the markets over the past few days has been
impressive. On a short-term basis the market has moved from oversold to
overbought very quickly. Therefore, if there are breakouts you missed, you may
be able to find a nice entry on a pullback in the next few days. As far as index
pullbacks go, I will be looking for one of two kinds to confirm the strength of
the rally:
1) Low-volume and orderly lasting 2-4 days.
2) Sharp and quick that will shake out some new longs and
then reverse within a day or two without allowing much opportunity for entry.
Either of these scenarios would tell me that the strength we’re seeing is likely
to continue. I would definitely look to focus on the long side at this time.
It is beginning to look like this move might have some legs.
I’ll be fully back in the swing
of things for Monday’s column. Best of luck with your trading,
Rob