oops

DOW S-T long counter trade

Long
DJ:DJI   Dow Jones Industrial Average Index
0
I am still short my S&P and long VIX (see my older posts), but I am inclined to make a wager on this rather short term trade. And here is why:

DOW Industrials sold off now 600 points and should face very strong support.
a) 13000 psychological barrier
b) 13080 100d SMA
c) 12972 200d SMA
d) Bull Trendline from lows Oct2011 via Jun2012
e) last support in Aug2012

My Target is not really far away because
a) 13250 is already 38% retracement from the latest sell-off
b) 13322 is the 50% correction of the same
c) 21st Aug 12 temporary top (which could well be a left shoulder of a potential H&S formation given the 13600 top, but way to early to give this prediction)
d) the congestion resistance Apr /May

Market is short term oversold , and usually I prefer action after divergences, which we have on shorter time frames, not on the daily. I believe the odds are higher for a counter move and I look at the bigger picture later.

A S/L is a little subjective here, but a close (not an intraday low) or even worse a 2-day consecutive close below all those Trendline, MAs etc supports will certainly negate this counter trade.

cheers KP
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