Monday, July 23, 2012

Watch for the trap

I'm not bullish here, especially with the way price is acting and breadth is coming in

However, it's important to watch for a trap here as over anxious and late to the party Bears can get squeezed pretty easily

We gaped down big, we sold off straight line for 20 minutes.  We just failed to make a new low, which means all shorts have NOT been satisfied.  If we can get a push towards the open here, it could induce some short covering, and although it may only be a flash move, it's still enough to take advantage of if you are nimble

Yes it's counter trend so that's where the caution comes in here, but don;t get one sided in your analysis, it can lead you astray 

Of course, if the lows get taken out, then it changes the short term model very quickly


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