Saturday, July 18, 2009

All hands effort to prop the markets..

I had been eying closely the fractal like similarities between the multi year post tech wreck rally and the price action off the recent crash lows. Everything seemed to mirror fairly closely until this last week where it appeared there was an all out effort by many to prop the market at a key point in the fractal structure (at the edge of the collapse).
I've rough sketched what I was seeing in the chart below. At this point I'm holding my shorts and will be watching if the dome highs get taken out on a weekly closing basis. Regardless if the dome highs get taken out we are still very close to the top of this market and I'll have to decide if I should cover and re-short up around 980ish or sit and take the heat in the event the next leg down is triggered over seas in which case there will be many regrets for having covered a few days too soon.. it's just the nature of the game. The second chart reveals the RSI setup on a weekly basis that is now unfolding and why I remain Bearish even if the dome highs resistance fails...


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