Monday, January 14, 2008

Ain't No Egg on My Face . . .Yet

Many were quick to get on me after the market failed to rocket up after my capitulation call last week. While I conceded that I could be wrong, I also pointed out that it is not invalidated until a breach of 1378 on the S&P 500. Capitulation bounces rarely go straight up. As long as the low of the capitulation day holds, the thesis holds.

So far so good. Volume is showing accumulation (more volume on up days than down days).

Be advised that my capitulation thesis is *short term.* I believe we are in a downtrend with more room for downside. This is not a long or even intermediate reversal call. Rather, it was just a call to play a quick bounce. Nothing more. I still am more willing to short than buy this market, but will make long plays in strong sectors and when I see a bounce coming.

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