Finally A Follow-Through Day, But What Next?

Posted by admin

October 16, 2008

That was one heck of a reversal. 800 points intraday swing. Today the Nasdaq gained over 5% on increased volume on the 5th day of its rally attempt which marks a follow-through day in one of the major index. However there is no leadership to be seen anywhere which makes me outright suspicious of this rally. But then again, who am I to argue with the market? We will take it day by day as it comes and adjust our trades accordingly.

Today’s reversal had all the ingredients to set up for a nice trading rally. Also of importance was the spike in $VIX (fear index). It spike to above 80 and that is a sign of some extreme bearishness. I will look to add to my existing positions or initiate some new trades. Stocks I’m looking at are Morgan Stanley (MS), Walter Ind (WLT), Energy Conversion Devices (ENER) etc. Watch out for the intraday posts on trade updates.

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