I will like to take this opportunity to take a step back to see where we are at now....all major indexes are down significantly. How far more to fall before this mayhem will end?
The chart below shows the SPY. Notice that the symetrical triangle keeps on extending itself as compared to the one on 21 Oct 2008. The stochastics reading shows that the market is neither oversold nor overbought, and notice that weak divergence.
Ideally I will like the last green candle to be higher than the previous green candle on 16 Oct 2008. A higher high, will at least force short sellers to cover their shorts. So based on the technicals, I see that we could be trading sideways or have a weak trend in the coming days.
Each time the price breaks out from the symetrical triangle, buyers come in to offer support. So the theory that prices should fall by the height of the symetrical triangle does not apply here.
Strategy: Not holding positions overnight, only plan to day trade.
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