With such power behind the last two day's moves, you would think that this market is over exaggerated. Look back however, to this move up into last April, before the flash crash. It was relentless to the upside with very few pullbacks in between. We could be entering this type of trading again with low volatility, and mostly a buy the pullbacks type strategy. Thursday was a beautiful short covering day, with me being one of them. I think everyone was short in these prices, so when we popped, we REALLY popped. The charts below show my thoughts in where I think the market will be going in the near future. Also, with QE2 still on the horizon, things could change in days so I would be on the lookout. My strategy now is to wait for confirmation before I get short, buy stock, and short vertical spreads, until this move exhausts.
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