Lack of market direction (11 Nov 2008)

Major currencies and commodities are showing mixed signals, currently there is no solid trend ... so I expect non other than a continuation of sideways trading in tight ranges.

Crude oil prices is holding up well thus far, despite a serious recession in the EURO zone. My barometer for commodity stocks is XOM, as long as this stays static...I am not expecting DIG or DUG to move very much.

I have identified a possible pattern to use as a guide for your trades. The chart below shows that SPY is quite well supported by the "Buy Line". You can use this trend line as support , but kindly note that this "Buy Line" has an expiry date which is on 17 Nov 2008. Use the "Sell Line" as a guide in the event of any bear market rally.

In the event that the "Buy Line" is breached, this will become invalid...then the best course of action is to wait for the bottom and buy your favourites.