Tuesday, October 04, 2005

Who pulled the plug?

Nasty turnaround late in the day. The SPX broke below the key 1225 level, and the selloff basically picked up steam from there. That left a big reversal day for the markets, on higher volume (read: distribution). The Nazz traded over 2 billion shares.

The bearish action likely means that the short-term direction is down. Yes, the trend can change that quickly. I know it's frustrating, but we have to be flexible. I am still looking for the market to rally during the fourth quarter, but it looks like we have to take a trip lower first.

I lowered my long exposure dramatically today, by adding some ETF shorts. I will still be keeping my eye on recent leaders, as they will likely make the strongest moves higher after any brief correction.

1 Comments:

At 3:59 AM, Blogger Herb said...

So many blogs and only 10 numbers to rate them. I'll have to give you a 9 because you have a quailty topic.

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