Wednesday, July 02, 2008

Oh my... or prelude to a market bottom...

Below is an extract from IM conversation which took place yesterday night with my trading buddy
"DavidDT (7/1/2008 10:17:27 PM): the more I think about today, the more I browse financial sites, the more uncomfortable I became with the whole notion of "establishing the bottom" today. too many cheering, downtrending channel continues, SPY still closed outside of acc channel ( by a notch, but still) - I think "someone" is going to get whacked tomorrow
DavidDT (7/1/2008 11:16:28 PM): Also, as I look not at the volume, but dollar weighted volume - today's volume is 60-70% of prior reversals volume
[- not good enough for reversal]

And guess what? I totally ignored my own analysis and stayed long QQQQ calls and added a lot of XLF calls. NO. IT. DOES. NOT. FEEL. GOOD. AT. ALL.

That been said...I think tomorrow $VIX will spike on open ( Jobs report, Triches ECB action - I don't care...) Selloff will follow ... and that will signify short term bottom.
Plus, looking at after hours QQQQ action attributed to NVDA fiasco ( surprise, surprise - is it?), last price is somewhere at $44.50 and that price fits perfectly into symmetrical triangle from New Year up until now, plus QQQQ is sitting on volume support...

In short... if QQQQ will hold $44+ tomorrow, we'll see that "second week of July rally" I was expecting.
Not to overlook that today's action in oil with vicious short covering in the last 10 minutes due to 6% margin requirement been raised looks really "toppy" to me...
( reminder: Morgan Stanley said: " Oil will be $150 by July 4th" - read: "get the hell out before 4th of July")

IF, which I think, is HIGHLY unlikely, QQQQ will break $44 area on downside...oh well...let's think positive...I am not even looking at market tomorrow, low volume, high volatility, I had enough of that for this week - will get "the news" on Monday.

Happy 4th of July ( kind of lost some significance due to " a lot of taxation and no representation" recently )

Don't keep your eyes in the line of firing of fireworks - well, if you are grown up and dumb enough to do that - then...good luck.

P.S. I am taking long overdue vacation, regular posts will resume in few weeks.