Yesterday the governments got the banks to take a 50% haircut on the Greek bonds, vs the 40% they had wanted. Also there were tacit assurances, that the governments, in effect, have the bank’s backs.
Not surprisingly, Dow futures are up 215 pts.
Between our July 22nd high at 12679, down to the double bottom at August 9th low at 10,338 and again with our October low at 10,328: That was a 2,351 point break.
As of 9:41 AM, our high is 12,094. That represents a 1,766 point rally from the October 4th low at 10,328 we’ve had a nice bounce back.. How nice well 11,800 was a 62% retracement. That is why over the past 4 or 5 sessions, that level gave multiple points to scalp around. I hope you took advantage. Today’s high reclaims 75% of that down move. 3/4 of the losses recouped inside of 3 weeks.
With the rally, I have been stopped out of my last shorts.
I am looking for a new high to sell into.
Chart points are 12,200, 12,400 and then the July 22 high at 12,679.
Net net, I think you look for a level to buy. if we dip down to 11,880 or 11,900 that would be a start. The old resistance becomes the new support.
As always, these markets can surprise with a violent move down.
