December Dow has one more support. As I write this, President Obama is speaking. The Dow is down another 115 pt.
The last support area I have is 12,560. Good Luck. 12,758 was a 50% retracement of the rally which began in June.
We are 1,000 pts lower than the high we made in the first week of October when we were at 4 1/2 year highs….
So, all things being equal, 1,000 pt haircut after making 4 1/2 year highs just 6 weeks ago isn’t really that much to panic about.
In the grand scheme of things, I’d continue to try to buy dips here. Using stops you should be OK. It is imperative you use sell stops anytime you are buying these dips. I’d enter the sell stop simultaneously with my buy limit order.
The grains had a shot to the head over the past 11 days as well. Today we finally heard noise that Chinese have come in to buy beans. After a 1.70 sell off in 10 days, I like 1) rolling down call options and 2) establishing longs with futures against the 14.00 level in SX. We got that print yesterday and rallied 35 cents. That was nice bounce.
We may have shaken the weak longs out of the market. I haven’t stopped looking at this break as a buy.
CER