Thursday

Thursday Turn

Last nights 300-point roller-coaster ride would have shaken off quite a few longs and shorts – clear manipulation at play. We held on tenaciously to our last Dow long position, but do aim to unload it tonight as close to out entry 7950 as possible. We will accept a small loss (which is a big win considering we have held it all the way down to 6480 – such is the power of under-leveraging). The turn is near/here – we pencilled today as the turning point a while ago. Our last countdown for the turning point had a margin of error by 2 days. We are at this juncture again, except shorting is a more dangerous game at these levels no matter how overbought people say the rally is. The technical blogs have all circled 9000-10000 as a target. That said, markets go up and down – and to continue to rise unabated would present less opportunity for market makers to profit. It also needs time to unfold regardless of the direction to allow the transfer of holding from smart hands to dumb (and vice versa). Hence expect more of last nights volatility. Despite the ups and downs, Dow closed up at 7749, still within target (3.2%) of 8000. A few months ago, 8000 was “so oversold” and “cheap”. After 6 weeks of mental conditioning, we now see 7750 (current level) “overbought”. Companies do not fluctuate in value by 20% over a 6 week period. Continue…