The stock market has reached the Intermediate Cycle Trend Line that I mentioned in my last post. There are only two scenarios I can see here:
1) Price gets rejected off the trend line and we re-visit the low or
2) Price blows through the IC line and the stock market rips higher.
This is why I did not want to just take us out of position once we approached the trend line. I wanted us to be in a position to have a strong hand should price continues higher.
The NASDAQ index has already crossed back above the IC trend line this morning and closed strongly above.
Looking at the weekly chart, if price remains strong tomorrow, it will give what is called a bullish engulfing pattern. You can read more about that at Investopedia. Clearly the bulls have seized control of this market. It just shows that if you have enough trillions in money, you can make most any problem disappear. It is possible that the 200 week moving average will act as resistance here. If that happens, it will help the first scenario.
So it is beginning to look like this is going to be a V shaped recovery which is really what our country and the stock market really need. If scenario 1 is going to happen, it needs to happen tomorrow. If that does happen we will be stopped out quickly and we can re-load near the bottom. If price breaks through the IC Trend Line, we will now need to chase to begin a position or to add. Chasing from here is not really a bad scenario. Friday will only be day 4 of this new daily, weekly, yearly and 4 year cycle.
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