Stock Market Analysis

Monday, November 05, 2012

Final Leg Down Coming Up...

The Dow moved sideways today, closing marginally higher by 19 points following last Friday's big down day.

If you have been following my blog long enough, you'll know that every big up day or big down day would most probably be followed by a few sideways or slightly opposite days. This is what happened today. US market took a hit last Friday just as I have predicted last Thursday. Indeed, big single day rallies within an intermediate correction are very dangerous signals and a small top candle following a big down day within an intermediate correction tend is equally so. Such a signal usually lead to that final down day within the intermediate correction before a bottom is reached. Yes, we could see that final leg down as soon as tomorrow so let's get ready to take profit on our put options trades!

(In fact, I just took 45.4% profit on PWE put options today... check it out)

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