Thursday, July 31, 2008

July 31, 2008; Buyers Still Strong

Well right at the open the market was bought up heavily, especially the Nasdaq. Plus, breadth is flat, showing that buyers are still in the market full force. There's no doubt the rally over the past week or so is losing steam, but it seems it still wants to push higher for now.

Regardless of the very short term, this rally over the past few days is just a correction within a very large bear market. Calling tops is very difficult and frustrating, as Diver said. So I keep my risk tight, and knowing the larger trend is down, I'll keep entering short with stop losses at recent swing highs. Eventually one will hit a huge wave 3 of (3) down will begin. If 11,697 is broken in the Dow, it opens the door to further rallying, and the S&P should gravitate to the 1320-1340 area before rolling over.

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