Monday, August 25, 2008


Looks like the SPY is slowly being dragged downward. If you shorted at 129 yesterday, things look like they are going in your direction. I'd leave the stop at 130.30 or move it up to 129.65 (the high for Friday). I'm looking for a reversal to confirm the bearish move. It may not come, but there's a strong resistance at 130/131. I'd be somewhat surprised if it were to break through 1300. Don't fight it if it does (although it's likely at some point to break down).

Here's the DJIA and it looks like a triangle is forming. This is a bearish market and therefore, it would be likely for it to break down (not sure I'd be contrarian here).

Speaking of triangles, WM is forming a nice one. I'd want to see it hold above 3.50 and, of course, start making and breaking some double tops. Safer to wait until the breakout. And probably still very profitable.

Note: Do your homework. Take responsibility for yourself. And always use stops!

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