Tuesday, June 17, 2008

Trade Alert: LEH

Now that Lehman Brothers and Goldman Gangester Sachs have reported earnings we will be looking at Lehman Brothers to short for the final ride down to the teens.

Stocks I learned typically move in three waves. In LEH we saw the break of 40 in May led down to 30 and a retracement to 35 for wave 1. Wave 2 was the fall from 35 to 22.81 and that has now retraced to 27.20 which coincides with the 8 day EMA. I want to mention that the volume on this last retracement has been extremely light.

The first two waves defined lower highs at 35 and 27.81. Now we will look for wave three, is it coming? I dunno, can only wait for Godot, we can't make him show.

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