Thursday, February 25, 2010

Bulls win on a red day

Yup, that's how I see it my dear readers. It was a red day, but I see it as bullish. Why, you might ask? Well, here is my rationale. The bears had an excellent opportunity today to take control of the markets but they didn't do anything with it. They had everything going for them in the morning:

(a) Fear - Speculation about Greece
(b) News - Bad jobs report
(c) Markets were close to overbought entering today
(d) TA - It would have been a perfect fall down from 50 day MA.

The bears were in complete control in the early hours yet the market closed close to its highs and only 50 points down. And that is why I see today as bullish. So, we are back to watching the 50 day MA tomorrow.

Personally speaking, I didn't get much time to see the markets today, which is good considering the way I have been trading this week. In the first few seconds of the day, I sold 1/3rd of my PMI position at 2.71 for a small loss. I was not comfortable with the size of the rest of my position and could give it room to run. And that's what happened as it did recover to close well. I added to my WFMI position later in the day which acted well throughout the day. I like how this stock is acting. It is at important levels but I would like to see some more volume come in tomorrow.

Another stock I like here is RDN. A break of yesterday's highs and it has no real resistance till 12.

I have a feeling that tomorrow is going to be an important day when we make a definitive move.

Take care and Good Luck!!

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