Thursday, December 3, 2009
Pattern Still Holds, Do You Play It?
The pattern mentioned earlier this week has proven to hold and has reached the end of the upper three day range (see shaded blue range in chart below). If you decide to play the Pattern, then you believe the Market will Gap down tomorrow morning and reach the bottom of the range. You would want to cover the position in the low $109s, perhaps, $109.25.
SPY 15 Minute Chart Showing Recent Pattern in Which We See a Gap Up Followed by Three Days of Trading in the Upper Part of a Three Week Range. The Next Day in this Pattern Shows a Gap Down. If the Pattern Continues, it Suggests a Gap Down and Move to the Bottom of the Range.
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Watch out for the possibility that we sell off before tomorrow morning, i.e. in the last 1/2 hour of trading or in after hours trading. I say this only because this pattern is more evident now and people could sell off ahead of tomorrow's open
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