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Market Recap: Somewhat Predictable, Low Came Where I Said Was Likely

November 14, 2008 5:16 PM

energyorbit.jpgI said near the open that if we were going to contain the selling, it is likely to come near the short term sma lines, which were about 868 at the time. By the time it got there, the line was about 870…. it reversed off that line with a low of 869.88. Once the shorts couldn’t reverse it, it made new high after new high.Well, until they cleared Thursday’s high. Then it became a “close day” and I knew trouble was possible.

I then said “if we clear yesterday’s high they better keep it going or the shorts will come in” It cleared it, and made a Doj at the high that appeared vulnerable. I then said “it looks like we need to clear 906 here to get the ball rolling to the downside”. It cleared and down she went into the close. I was hoping for a firm rejection of a high and if we got one, I figured the shorts would come in big. While a doji isnt as firm as I prefer, it was close enough. Once that doji low cleared, the shorts had the number to be short - 916.88 and they attacked it and it fell 40 points, 400 on the Dow, in the last 45 mins.

The longs should not have cleared yesterday’s high as once that happened the market HAD to break big into the close. Well, at least it was very likely. They forced the issue - big mistake. I mentioned several times “ok, yesterday’s high has cleared, expect big volatility into the close now”. And we certainly got it. If the market was open another 10 minutes the day’s low would likely have cleared. It was most likely saved by the clock.

This is why I mention “close days” almost daily. Once a day becomes a close day, expect huge volatility into the close and you have to be very, very careful.

Written by Tom@StockBlade.com · Filed Under SP Futures 

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