March 2, 2005: Inverted U-turn

After close analysis:

Today was jail confinement for me (hehe), so didn't trade. Ok, so added more colors and ranges to charts (better than nothing!). This was an important day as it did confirm beyond any shadow of doubt that 10875 is "the" level on the Dow! Market reversed after stopping short from hitting this level (wow!) after a morning rally that signaled a TD but with weaker breadth there was something wrong with this picture! Interesting to see tomorrow if we get continuation down. If so, then any morning break below today's lows might be a bear trap, so waiting till afternoon is the best thing I can do-leaning towards shorting though. Finally, nice 6bo setup on reversal.

Observation(s) of the day: the 4 bar cnsld on AB sure looked heavy which looked exactly like Feb. 23 & 15th (and Jan. 27 as my gurl pointed out) - market reversed course. Also, the divergence (the what?!) between breadth and upmove on futs was a warning sign.

Thought(s) of the day: if there's something that's gonna bring down the housing bubble it's the pattern of 10Y notes and 30Y bonds! Oh man, reminds me of Oct. 2000! More on that in weekly rehab. Grains rallying?? Oh no!

Market breadth opened lower than previous day and couldn't take out yesterday's bo range. Addq, Add, and Vold hit resistance and reversed. -ve xover on all!

Futures rallied in morning but then had a bear cnsld pattern and reversed to the downside forming U-turn ("House") pattern. AB, NQ, and ES all reversed and their butts are well-rested on emas (hehe). With -ve xover on breadth, shorts will be setting up. ES200R amazing chart is still in bullish zone but has multi-day wedge. To watch for tomorrow!

Indices were highlighted by 2 important things: Dow's 10875 level (bull/bear per my analysis!) and SMH/SOX's multi-day wedge that was slighly breached before the close. Not good for the bulls for sure!

Overall neutral day!