In last Friday's The Week Ahead...Tying a Bow On It... forecast, this was my ending paragraph on my thoughts...
"I believe we see a downside move early next week that finishes the work on the base that was occurring late this week, I think it would have been done today if not for options expiration which needed higher prices to cause all of those put positions to expire worthless.
I believe after that, we are going to see a sharp counter trend upside rally next week and perhaps longer, we'll confirm, but that's probably where I enter more positions as I am looking for solid objective evidence before increasing long position exposure, but I think those are the probabilities for the week ahead."
I always find it interesting how 3C divergences at the end of the day/close, tend to pick up where they left off the next trading day, even over a 3-day weekend.
Even when Japan announcers the GPIF (Japan's pension fund) will increase its stock allocation from 12% to 25% overnight ($144bn to $300 bn) sending the Nikkei up +3.98$ to its best close in over a year and European stocks opening with a gap higher, yet still, we end up right back where 3C's late day closing signal suggested with a gap down and the pullback expected or at least we are headed that way after the entire overnight ramp was faded...
Other than that, our expectations are simple, they're in the paragraph above from Friday. We'll be looking for a base area to finish the work it was nearly done with last week and to confirm the divergences, it could be a beautiful second chance buying opportunity, but confirmation first.
No comments:
Post a Comment