Monday, July 28, 2008

July 28, 2008; ???

"???", is the title of this post because I don't know what the short term direction of the market is. The larger picture is clear, the market is headed lower. The Dow should gravitate to at least the 7,000 area before a bottom can even be considered. But there are 3 options in the short term, and they all have equal weigting to me so I will stand aside for now.

One thing to note is that there's bullish divergence on the MACD, stochastics, and RSI on the 30min and lower charts. Because of this I bought the double long Dow ETF (DDM)at around 11,200. I'm looking for a pop rally soon, perhaps tomorrow, to reach around the 11,400 level. I will close my DDM position at that time. From there, I'll have to look at the market to see if the next wave of selling towards 7,000 is underway, or if we have more corrective rallying to do.

Right now, I just don't know.

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