Thursday, November 18, 2010

Whipsaw or another chance to short the market?

It's just 11.15 am, way too early to anticipate how market is going to close but an important technical level was touched this morning and I thought I need to warn you. I am talking about 5 days SMA! SPX had a huge jump today due to GM IPO and a possible bailout for Ireland. We need to be carefully here and watch to see if SPX is going to able or not to climb above 5 days SMA. My guess is that this a big bull trap but we should never underestimate "the enemy", our beloved bulls in this case. If SPX close bellow 5 days SMA (around 1198) I think this is a perfect opportunity for reluctant bears to short the market.

2:30 pm update. It looks like bulls are failing  to push SPX above 5 days SMA. Volume on SPY is low. If ends like this you should go short if you already didn't do it.

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