Saturday, January 03, 2009

Last week the market tested the lower range of support, bounced hard, went straight through short-term resistance we had shown the week before, and never looked back. All bullish. Real test will be what happens when volume pours in the market again come Monday.

The recent move has been strong and the sentiment bullish but keep an eye on the bigger picture: an up-hill battle in a completely broken market. Our guess is that this holiday-induced light-volume rally will be tested sometime this coming week.

If you, like us, haven't traded much in the last 2 weeks then take it easy on Monday as reflexes tend to be slow down somewhat after being away from the market. Make sure to "warm up" first with smaller positions on Monday morning. For you addicts that traded straight through the last 2 weeks, then of course, it's business as usual.