Intraday bastard...

After a 35 point drop, the Dow gained 17 at days end. Very bullish reversal...

What bothers me is that the XAU rose with the Dow and on a day of gains for the dollar. Gold should have dropped. This is the current market, very little fundamental sense, but we've got to play the market, not what the market "should be".

With that said, read this. A big "unforseen" event may trigger the downside we're all expecting.

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puts for a bad day...

If you're looking to go short before the Labor Day move, look at RIG. Downward pressure on oil, good H&S. Also check out LRCX. Revisiting a very pronounced H&S.

Keep in mind that today's action is horrible for the bearish stance and if the gains hold, could signal a reversal. trade carefully!


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Dow INDU reverses

After breaking through 11,285 and 11,344, it looks to me as if the INDU has broken above its former intermediate high, and has established a higher high. Still to be seen: the higher low.

It could be argued that this is an invalid occilation, since the rebound is from the 50 and 200-day MA lines rather than from a test of the previous low. That may be, however even if it is, that would indicate that this is a minor occilation from a wave that will retest the May 11,670 high.

As it looks to me, this is an intermediate term Dow Theory reversal if it tests but maintains the 10,683 low.

With that said, I'm looking for a short-term reversal to test the 10,683 low. I've entered shorts on BBBY, XAU, and CP (gathered form Trader Tim) and on DIA as a play on the INDU. I look at these shorts as two to three week positions.

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The range...

So the Dow is stuck between 10,600 and 11,200 roughly. I've been tagging puts at 11,200ish and riding down because I believe the eventual market is a bear. I've been doing pretty well at it, but could of course be doing better. Either way, I'm whooping the S&P.

What's the outlook? If the Dow breaks 10,600 downward, we're looking at a serious bear. Over 11,200? Intermediate bull, but likely to be just the last wave upward... Keep your eyes open!

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