Wednesday 18 April 2012

Bearish view in danger or still correcting?

Yesterdays rally was not expected by many but as I mentioned in my morning report I tried to pick a bottom and entered long at the time of the post(ES_F @1361). However I still believe that it can come back down towards 1340 area. The index has made 3 waves up until now. For this move to be impulsive the market should accelerate much higher above 1400 soon and eventually make new highs. A more complex correction would delay this scenario. This means that we might be in wave B and another down leg is expected. I'm still long and confused as to what should I do. The most safe choice would be to hold my longs and reverse if the market moves below yesterdays lows. I could also buy some puts to cover my long position in case wave C down towards 1340 comes.

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