2220 Points Determines the Final Rebound Level

2008/9/10 11:18:07

Need to leave right after the afternoon close, so a few words first.

As clearly stated last week, what's worth watching this week is this rebound. After a perfect decline composed of two small hubs, the final divergence was completed this morning, perfectly coinciding with the favorable CPI drop news. The market saw a significant intraday rebound. Obviously, it subsequently met resistance at the 5-day moving average. Therefore, the next task is to conquer the 5-day line. But what ultimately determines the level and height of the rebound is still 2,220 points — hold it, and the level will be larger; otherwise, it will probe down again.

Looking at the worst-case scenario, the minimum-level rally has already been completed, so whether the 5-day line can be conquered is the key for these two days. Fundamentals should see further improvement. If all factors can align, the best outcome — where September and October form a monthly bottom fractal — can be realized. But who knows whether certain big shots will pull some trick again.

Read the charts and do your homework. Overthinking is pointless.

If all goes well, I'll write a post for everyone tomorrow. Heading off first.