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Down Day Brings Back The Uptick And Ban Shorts!
By: Piker Trader   Friday, May 08, 2009 10:14 AM

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The market finally had a down day.  But although it looked the bears would regain control of this out of control bull train.  The bulls came back and kept the SPX above 900.  Had the market dropped anymore, screams for the uptick rule would have started since the bulls are the biggest sore losers since the Hawks from Mighty Ducks the first one.
The top of the trendline held as resistance for the market.
The SPX also had the most volume in the last couple of weeks on a down day.

 But there were some other signals that the market could start to pull back.
The VIX now looks bullish.  Hitting a low of 31.93 and bouncing.  It looks to have formed Ladder Bottom candlestick pattern. (bullish)

BKX was another index to look at.  It popped up in the morning but was met with strong resistance pushing it back down and forming a Shooting Star candlestick. (Bearish)
XLF which has lead this market finally made a strong gap up but met the similar resistance as the BXK.
Two of my scenarios occured today:
XLF> 12
VIX<32
So I bought some SPY puts and shorted some XLF.  Also the Q's breaking down today help me enter this position, since they were leading this market.

The bears will need confirmation and another down day, the bulls will just have to hold support.  The Stress Test has finally revealed and there is the important Unemployment data tomorrow it should be an interesting day.

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The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
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