Friday was an extremely weak day in the market. We had a true selling day on Friday across the board. Today is shaping up to be a strong day. Today is Monday. Today is the last day of the month. Consider this passage from trader Gary Smith:
"One of my more reliable momentum patterns over the years has been the Friday-to-Monday pattern. Stronger-than-average strength on a Friday is expected to be followed by more strength on Monday (or Tuesday if Monday is a trading holiday). Conversely, extremely weak price action on a Friday is expected to lead to more weakness on Monday. A Friday-to-Monday momentum break pattern occurs when the expected strength or weakness on Friday doesn't carry over to Monday. These weekend momentum break patterns are highly significant and indicative of a short-term trend change."
Source: Gary Smith, How I Trade for a Living, page 112.
If the market closes up today, then the momentum pattern has changed on a Monday following a weak Friday. Thus, I would change and revise my top target from 1294 to 1320. The volatility should increase between now and the end of February.
Have a good day!
Wink
Standard Disclaimers
1. This blog is for educational purposes only.
2. None of the individuals associated with the Las Vegas TSP Investment Club are registered financial advisors.
3. This blog is not an offer to the public to buy or sell any stocks, options, commodities or futures.
4. You are encouraged to do your own due diligence and to consult with a professional financial advisor before making any investment decision.
5. This blog cannot take responsibility for the results of your investment and trading decisions.
No comments:
Post a Comment