REVERSAL!!

That was quite the reversal today. The DOW was up 87 before closing the day down 81. That is a 168 point move down from the intraday high! These types of intraday reversals usually have some follow through. I would expect the market to continue to move down a bit tomorrow. If we can hold at today's lows and rally up tomorrow, it would again signal the strength of the uptrend and you would want to buy into that type of move. I would like to see another drop like we had in the beginning of September and the middle part of August. This would create very nice buying opportunities and allow the market to adjust from its current overbought condition. Most of the patterns I gave you yesterday pulled back today...some more than others. If you got into any of those trades, make sure you have defined your risk (stop losses) in case the sell off continues. For those that didn't enter any of those patterns, keep those stocks in a watchlist and wait for confirmation before entering any trades. I like to use something like today's intraday high or today's opening price (whichever was higher). If the stocks are able to shake off today's move and rally above today's high, it will have reversed the sell off in one day. This (combined with the overall trend of the stocks) would indicate some nice confirmation to get into the trade. If these stocks continue to sell off in the next few days, you could start to look for new entry techniques using many of the ideas I taught you in the course. Try not to buy if these stocks keep falling. We don't know yet how far the correction will go. Keep an eye on the 10 day MA. We haven't been below it since the beginning of September. It could be an early signal as to the depth of this retracement. One quick note on RIMM. It has made a very nice move since it broke out of it's triangle pattern (about a $10 move). They are set to report earnings after the market close tomorrow (Thursday). You should consider getting out of most of your trade before the market closes. This stock could break in either direction after the earnings announcement is made. Why risk giving back a large chunk of your profits if it sells off after the announcement? Keep 1 or 2 contracts, but sell the rest. You option should have doubled or tripled on the $10 move it has already made. Remember the old Wall Street saying...Bulls make money. Bears make money. But pigs get slaughtered. Don't get too greedy.