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Wednesday, November 24, 2010

Side of Mashed Potatoes

Sideways and volatile is right. Large gap downs will be filled back up. Recall Dubai World about this time last year? Huge overnight gap down and was filled back up? Same deal with the North Korea artillery strike. The market is filling that gap as we speak. It just doesn't want to break down yet.

So my count is below. Is it an ABC zigzag? or ABC(DE) of a big triangle? I layed the case for a sideways move. http://marketthoughtsandanalysis.blogspot.com/2010/11/silly-season-is-coming.html.

Silly season is upon us. Setups that look like they have a lot of downward potential (and we had several last Nov/Dec) will hit support and bounce off IMO. I am really skeptical of a strong down move prior to December/January at this point. The bears had one good shot at the very beginning of November and that opportunity was blown.

I think being very bearish right now is not the right call. Which is too bad for me :( But at least I can be a cautionary tale, at least to the trading shorts :)

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