Ander's Market Theories

[AnderL]

Excellent bounce in the equity markets. Tomorrow we will see if there is follow through. We don't see a sell off in the afternoon meaning that sellers are weakening and traders are holding gains to go longer. How much longer? We'll see if they hold over night here in the last half hour.

COMPQ and INDU are above there 200SMA and this would be their first official test of it after breaking up and over it back in late October early November. Bulls will assuredly see this as a test of support before continuing the rally up. I'm expecting some bullish sentiment to increase over the next month.

April is considered the last good month of gains before the summer doldrums appear and the Fed does not meet again until May 12th. That leaves plenty of time to get in a good few weeks of gains before another breakdown.

I still consider this moderate to high risk because the falling wedge formations on their indices have not confirmed a breakout which should happen this week. Falling wedges are high probability breakout formations. There is little downside risk in them. Unfortunately a market can breakout of it in a sideways channel limiting profit potential.

I will be going long the equity funds this week that track the S&P500 and the NDX and increase positions on a breakout. I'll post my funds list later today with charts. I'm using Profunds Ultra series, and Sector based funds.