Look at the pf-chart of 2% 3 box reversal chart and you will find no real activity recently. The bias is to the upside. I will wait a while longer before committing any funds to trading. If the market goes above 860 I will try the long side. The volume today was not impressive. I think that market went up too fast in March, even for Bulls, and people are taking a breather. Now we have to wait for some market moving news to show up. I can think of two types of news that is pending - one is a resurgence of news about zombie banks - that will drive the market lower, and another is orders are up - that will light a fire under this market. If I hear that news during the day time I will jump 3x leverage full steam even I lose 2 or 3 % before I am able to get in. SP500 will be going 1000 in no time with that kind of news. If we get bad news first then I think we are going to around 750 before bouncing right back up. Those are my hunches. Will I trade the short side? I think not. We are too close to the bottom in this cycle and it is probably not much return for the risk to be taken on the short side. Think of two factors that favor an overall bull run this year - (1) Stimulus spending will start to show up in the economy during summer and (2) Fed's guarantee to not let a washout of bond holders. So, if you want to play, it is safer to be on the long side this year unless you start see scare news start up again. Buy the dips and sell the highs probably will be a good strategy for really short-term traders. I am trend trader, so I will like to see some trend develop. Right now there is no trend and I will wait it out.
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