Monday, October 3, 2011
Well there it is below 11,100. This is a big decision point for the market. You can see how it has traded in a wide range between 1110 and 1230. At 1099.21 is resting at the lower end of critical support, if it breaks through here 800 could be next.
This could be another fantastic shortselling opportunity. But not so fast remember that the printing press and the plunger protection team still stand in the way. Also October is known for its turnarounds.
Why is there so much volatility in October? The answer is simple. On Wall Street, the money managers, the hedge fund managers and mutual fund managers, make their Christmas bonus for the year based on their performance in the last quarter of the prior year. So, see what I mean? This could be just another giant fake out to scare all the weak hands into selling so that the big money can buy on the dip.
We won't guess, we will just watch 1,110. If the market breaks significantly down tomorrow then we will step into short positions. Otherwise we will go long and watch market trade back up into the range just below 1230.