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Originally Posted by MEMMEZZ
So as predicted by Vanity and Mact we had a great surge today. However the last hour of trading was a little shaky but seemed to find pretty decent support at around 1185 and closed up almost 3%. I believe its been a while for bull day to not end with a big sell-off so would you guys consider this a positive note for tomorrow and the rest of the week? I know you both have targets of 1225-1250 before looking to go short but without more positive headlines, I feel like the market would easily erase half or more of today's gains by tomorrow's close. Are you hesitant right now with any negative headlines initiate "Defcon 3" and consider the mini-rally to be very small or leaning towards more confidence throughout the rest of the week (or at least a couple more days)?
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Market passed the first resistance level predicted at 1185-1190 range and held it at the end of the day. The next resistance would be 1200-1220 and it seems likely we will clear this tomorrow. To add to the comment about the rally at the end of the day, that logged in 100M+ volume. This is by far a return of volume that we have been missing for a while, and I have been waiting for fuel like this for a while. But, the retail investors returning to the markets after today's pop will be the backs you should get out on. The rally will sustain for 1-2 more days, perhaps three, though 1250 - 1275 shouldn't take too long. The ride down will be rather fun! Retail investors will largely be reassured by: 1) Greece bailout tomorrow, 2) EFSF fund being increased 3) some sort of resolution coming out of EU summit Dec 9th.
This would be the exit window to get out before everyone else does. News like this are disregarded very quickly after their publication. Nothing is going to come of this week. But it's an excellent window of opportunity to short the markets and load up.
I believe the shorts, EDZ and TZA, I've been eyeing have lost 14% each, respectively, today. Tomorrow, they'll lose more. And on the way down, we will see a very high upside to these ETFs.
Tuesday should be enough good news to trump Italian Bond auction. Rest of week seems to be just a slew of US data, but we will not have a rally on this information, imho. 8/10 rallies we have had since this volatility began were run on Euro-news, and only 2/10 were run on economic data strength. Odds of this rally being sustained on US data coming out at the end of the weak will grow slim and thin.
Wednesday/Thursday is my personal target for getting out of longs and jumping into shorts. Though trade accordingly. While my predictions are on the conservative 1220 side of this rally, I know Mact is seeing 1250-1300's possibly, and I know others whom do this are projecting 1275. This is a 80 point window where anything would turn around. No one really knows when it will stop. I do assume after 1250 we will begin losing momentum either fast, or altogether.