Thursday, August 25, 2011

End of the rally?

About 20 minutes before the market open, news hit the wires that Warren Buffett invested 5 billion in Bank of America. The news caused a 1% upspike which gave us a nice gap up at the open. Stocks kept rising for another 5 minutes, but then everything turned and kept falling untill lunch. Yesterday's lows were support and stopped the bleeding. The low got tested again near the close, but it managed to hold.

On the daily chart, indices are printing bearish engulfing candles, a sign that we might go lower.

Gold gapped down big, but rallied during the day, ending near yesterday's close. Silver even managed to make a 3% gain.

We bounced of the lows, than some consolidation and a bullflag seemed to form. A breakout with good volume followed and I went long on SPY (green arrow). Within 10 minutes we broke the low of the long green candle and out with a loss (red arrow).

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