On June 16th, 15, and 22nd, Dow futures found support at 11,800. This corresponded with 11,862. Between That was roughly 3 weeks ago. 10 trading days saw the Dow Cash Rally 853 points !!!! Last Friday’s high was 12,753. The May 2nd high, just 2 months ago, was 12,876. That was a one year HIGH. So for the pundits to raise their hands and call the top, call the next leg of a double dip recession, call for the beginning of the next great depression, I believe is just pure hyperbole.
Most of these guys saying this don’t have one option or futures position backing up their “opinions”. They are newsletter writers trying to catch lightening in a bottle by calling a top. Then they can write a book, go on tour and make more money doing that then ever dreamed about from their “trading”.
There is good support at 11,900, 11,600 11,400, 11,200 and then 10,700. Any one of those could hold.
FACT: On the July 4th weekend just last summer, 2010, the Dow was down at 9614. Hello? Reality Check please>>> That was a major low.
And if you go back and read my blog entry then, you’ll see that I felt the panic I saw on cable news shows warranted actually getting long on the fade of popular emotions.
Popular emotions are rarely correct. Case in point, Jerry Lewis’ popularity in France.
So, I have am being patient here. I am a small long from Friday’s lows, but I have stop orders below to manage those longs.
Looking at the charts, I could definitely see us breaking back down to 12.400: 12,300 or even 12,210. At some point I have sell stops which will get me short if we continue to melt down. A flip from long to short to catch the move down.
My hunch is that we will see the stock indexes trading in a 2000 pt trading range until we get through the next Presidential Election.
That is all
CER