SPX buy signal at the close

The dreaded V bottom bagged the bears today.

My system issued a momentum buy signal on SPX at the close today, having being short since 3/2/06.


I mentioned a couple of days back about the Technical vs the Tactical trading. On March 10 i wrote,

On the other hand DOW issued a daily buy signal today, suggesting a "V" bottom might be in place. I don't trust the DOW and NDX daily signals for i think SPX is the proxy for the U.S markets. SPX and NDX remains on a solid sell. Remember this market is all about tactical trading. My above mentioned technical scenario may or may not work, as the whole world knows how to pick a divergent bottom, creating efficient markets, if such a scenario were to pan out. So from a tactical trading perspective, we are at the right juncture to mount an assault on the bears. There are tons of bears out there with huge stops above the SPX 1300 level. And SPX is just 15 points shy of the 1300 level. So if we were to rally and take out the 1300 level, there should some massive short covering. Also NDX is perched just below the declining tops line from 3/3/06. If we were to gap up above that trendline on Monday, a lot of trapped NDX bears could get scorched badly.




The technical expectation of a "W" bottom apparently did not occur. The tactical trading dominated once again and the dreaded "V" bottom is in place now. Look at how nicely the CCI put in a V bottom. Bottomline, i will be looking for longs going forward.