Monday, May 17, 2010

A bullish day no doubt but....

A valiant fightback by the bulls today which not only helped them recover from a precarious intraday position, but also end the day slightly in the green. Normally, I would call this the time to start taking small positions on the long side but you know that we live in anything but normal times dear readers. I have my doubts on the strength of this comeback by the bulls and would need to see a follow through day tomorrow to get bullish again. That makes tomorrow an important day in my opinion. 1150 is the immediate resistant level with 1115 being the support. That said, the market is still not right to place your bets if you are a swingtrader but if you are a daytrader, you have got to be loving the volatility. It might sound boring but I still think cash is the best position to have here until things get sorted out on either side. Remember dear readers, sometimes taking no position is the best position you can take.

As an interesting sidenote, the doji formed today is very similar to the one formed in early February which marked the end of that pullback. I have marked this on the chart above. Will history repeat itself here?

Take care and good luck!

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