The market sold off at a key resistance level on Friday. I added to some of my bearish positions. As of the time of this posting, the S&P 500 futures are up over 13 points. If this holds through the night, it would mean that the Dow would open up by about 130 points. That would not be the sign of a bearish move. In fact...if we close above Friday's high tomorrow, I'm anticipating that the market will move up and test the September 1st high...around 1227 to 1229. If we gap higher tomorrow, I will likely stop out of those bearish positions. This possible rally was anticipated a few days ago. I felt that we would drop down to 1040 before starting that rally. If we close above Friday's high tomorrow, we would likely be in that expected rally. If somehow the market drops at the open, I will stay in my bearish positions and look to see if the selling intensifies. If you are short this market, stop out if it rallies higher! Don't try to wait it out. This potential rally could last a few weeks. I might even look at some bullish trades if we close higher tomorrow. I'll post something on the blog if I see anything that I like.
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