SPX tech outlook -the bottom of this leg is about to be finalized

The most important part is about to be finalized the test of the 2002 lows. As we do that we have a daily 11 count today, if we close lower. The weekly count at 10 though might need 2 more weeks (lower closing weeks). We are trading about 150 points for the SPX below monthly Bollinger, so we have a low risk trade now as we can gain 20% to the upside and the downside might have 3% risk for now. It’s definitely about time to start covering shorts and even for the bravehearts to start buying longs for a trading purpose only. When you ask what will trigger the upside – it is a synthetic short covering as long only managers sit on big cash these days and as soon as the redemption wave is through, which always happens at the lows – the Obama humongous aid program will start (that’s an almost safe assumption), a temporary rally with lower rates by central banks in December is a given fact. Around 770 is a good point to start buying – but keep in mind that we will have some wild swings into December, as markets will build a severe low, that’s the way it’s done.

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~ by behindthematrix on November 20, 2008.

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