Click chart to enlargeThe market broke above its moving average on the 2 minute chart, so hopefully we've shifted back to "buy the dips" at the line rather than "sell the rallies" at the line. We used the breakout as a chance to dump the FXP we bought this morning, losing 5 points. It's just too hard to go without that insurance when the market is trading below its downtrending moving average.
If it reverses again, we'll have to add it back. So now we're 40% long, 60% cash once again.
Of course the hope is that this rally is strong enough to bring us back to the center of the projected trend channel so that the next drop is a test of the channel (higher low again), rather than a break of it which we were facing last night and this morning.
We're keeping a close eye on 4 charts that have descending triangles, MOS, GE, SID and LDK. Descending triangles coincident with new recent lows almost always break down. If these charts break down, it could drag others below recent support and take the market with it.
2 comments:
I might be wrong. But the Dow and the S&P also look like descending triangles to me. The German DAX definitely does.
newfrankyboy
You may very well be right. They aren't quite at recent lows, but if they get there and then break down, a global crash is a real possibility. Scary stuff, huh?
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