Thursday, September 1, 2011

Market retreating after being overbought

With ISM-numbers coming out half an hour in the session, buyers turned up, sending the indices up about 1% under 5 minutes. A big spike up on big volume.

However, yesterday's highs proved to be solid resistance and after some chopping around, the market headed south slowly.
With indices closing near the lows, undercutting yesterday's lows and after yesterday's spinning tops, action looks very bearish. But then again, this was to be expected with the market being overbought (McLellan Oscillator was at 85 before today, over 50 is overbought).

Updated daily DIA-chart:

Gold and silver were trading in small ranges, printing inside days. Oil not doing much better. Tomorrow could be key, with nonfarm payrolls coming out and a 3-day weekend in front of us.

I bought some leveraged inverse ETF's halfway in the session. Only half position sizes, I will add when/if the market goes lower on volume or breaking a possible bear flag.
Long BGZ 39.55, SL 38.00
Long SKF 72.12, SL 70.00
Long TZA 42.63, SL 40.00
Long FAZ 53.83, SL 51.50
Width stops, giving these puppies some room to play... For now they're all green, but that can change quickly with these leveraged ETF's, hence the width stops and small position sizes.

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