That’s What I Call a Good “Bitch Slap”… »  
  « Time to Bounce…

Almost ready for a bounce…

By Red, on October 28th, 2009

Man_Napping_in_a_Hammock_Thinking_About_Obama_and_the_Stock_Market

Today was a flat consolidation day as expected.  I’m still looking for the 1040-1050 area to be hit before any decent bounce back up.  That area has multiple supports from horizontal and 2 upward sloping trend lines.  And the moving average is also in that area too.

That means that a bounce is almost a sure thing.  Almost being the key here… as some disaster or political event could cause a big sell off.  But, under normal conditions, the market should bounce in that area.  After the bounce is over, the selling should continue until we hit 1020 (next support), at which time I expect a pause before breaking through.

Remember, 1020 has held in the past, but I expect it to fail this time around.  Next will be the 998-1000 area.  That will be the first hit, and has an 80% chance of a bounce.  I would expect around 50% retracement back up from the 1102 high when that area is hit.

The fed has more auctions on Thursday and Friday.  I expect that is the main reason that the dollar has been rallying.  So, you could see one more push up on the dollar tomorrow, ahead of the auctions.  After the auctions are over you can expect the Fed to dump the dollar again.

This means that the market should find a temporary bottom around 1040-1050 tomorrow or early Thursday, then rally as the dollar get sold hard after the auctions are over.  You would think the everyone could see that the government simply props up the dollar before every auction, and then dumps it, which causes the market to do the opposite… but wall street just plays along until the party ends!

Red

Time to Bounce...

Share This Post

No related posts.

Leo's Den
That’s What I Call a Good “Bitch Slap”… »  
  « Time to Bounce…