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August 4, 2009 / Jeb

Market Summary Explosive Market Rally Off Failed Head and Shoulders

The market indexes has had quite an explosive rally after the failed head and shoulders pattern I called a few weeks ago to the day.  I as well as many readers have made significant gains off that call.  Please see the blog post.

https://goldstocktrades.wordpress.com/2009/07/15/head-and-shoulders-failure-cover-all-shorts/

Today we are up significantly from that point and are entering extremely overbought territory.  I am watching my trendlines carefully and am ready to take profit on any significant break.  Meanwhile from that date most of our positions are up significantly and I am seeing a bottoming process with excellent charts from many different sectors.

I can imagine a short term correction, but am noticing opportunities to make huge gains ahead as the economy starts rolling.  Basic infrastructure, industrial commodities and stocks trading at incredibly cheap valuations will move significantly higher.

Look at the SPY.SPY

The circled price bar is the day I covered all shorts and went long my stocks. I am watching the rising wedge carefully as I believe the markets are overbought(notice the high macd and rsi) and will shake out some weak hands as we move to the support which was prior resistance.

I do believe we are breaking into the beginning stages of a new bull market from my review of many key stocks.  This could be a magnificent opportunities to astute traders to make huge gains.

Stay tuned and I will try my best to keep my subscribers and blog readers in touch with any changes.

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