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A new day, a new bounce. As we discussed late yesterday, SPX has reached the bottom of the purple channel that’s guided it since 1343. So, naturally, we’ll get some reaction — probably at least to the white midline at 1495.
Whether it sticks or not is pretty much up to Ben. Press conference at 10AM EST.
UPDATE: 09:40 AM
Many Bernanke pep rallies have left me feeling like a crash test dummy. I’ve learned to keep my stops tight or stay on the sidelines all together. For intrepid day traders, I suggest staying nimble. A breakout or breakdown is to be expected.
But, we did just complete a H&S Pattern, and that counts for something — as do the incomplete harmonic patterns. We’ll take a look as soon as the Bearded One is done scolding Congress for messin’ up a good thing.
UPDATE: 12:30 PM
Equities are clinging to gains following Bernanke’s testimony — which was mostly a non-event. IMO, he said nothing to help the bulls’ or bears’ case, which means Italy and the sequester will likely drive prices over the next several days.
We should continue to see periodic bounces over the balance of the day, but the onus is on the bulls now to turn the trend. We’ll keep an eye on the 5 and 15-min RSI charts to determine breakouts that merit an intra-day long, and revisit the daily charts to get a sense of intermediate-term possibilities.
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