friday night trading, page-117

hi nl, yeah, thats a plausible scenario but them bulls was scarily bullish tonight. There could be a piercing test and retreat from the 200ma as an exhaustion move, or there could be consolidation under it before a more solid offensive, or the 200 ma it could be the start of a general retreat - another leg down. I'm in favour of the piercing test, and then the bulls would try to hang on above the 200ma using it as support. They really need to turn the 200ma upwards, and the only way to do that is to get above it. A break up from your channel would suggest an exhaustion move possibly, and an ideal short if you're bearish. I'm bullish for several reasons: one, the existing trend; two, liquidity - theres a huge amount of money looking for a home and cash isn't the answer with the fed devaluing the currency, bonds are looking sick, and commercial property is a bomb site. Commodities are bullish, but where else aside from equities. As for a possible surprise, always possible but surprises tend to confirm an existing trend - although a surprise at major resistance or support always makes a good story and can change the direction of the trend. So aside from surprises, any pullback should be seen as a buying oppo. Given the huge volume on yesterdays pullback plus tonights action, I wouldn't be shorting this spx sucker below the 200ma at all. An exhaustion move such as a piercing test without prior consolidation below the 200ma might be worth considering for a short, but preempting the market is almost never a high probability trade (aside from when prophet does it. Where is he now anyway?) cheers!