8/9/2011 premarket

Morning folks.   Looks like the market is set for a gap up today with the spy ticking up 1% so far premarket.  Im expecting a choppy session as we have a Fed day today and investors will be awaiting word from “he who has no name” aka helicopter ben.  Yesterday was one of the nastiest daYS In th market ive seen in quite a longtime.  One of the common themes from quite a few people was that the s&p news was probably priced in and the move on Monday could be muted.  Well mother market started off low and cascaded lower and lower all day culminating with the Presidents speech (where he showed up an hour late) where the sell programs started ripping in order after order as the speech was finishing.  I guess they didnt like what he had to say…..  The close or the selling had a sort of climax type of feel to it..but i still couldnt get a good read on whether that was it or not.  As always ill let price confirm itself on the upside before i make a decision.  In terms of oversold or breadth yesterday we closed with numbers that i havent seen before at least that i can remember.  Obviously with such a strong breakdown out of our yearly range the overall trend has changed dramatically but at this point there is more upside in the market then downside shorterm.  Any type of bounce we get should be initially distrusted and be skeptical of as there are a lot of bagholders in this market looking to sell on any bounce and raise cash.

advance/declines/ , up/down volume, all of them were showing readings i havent seen for a while. this tells me that we are close to a bounce.  This is good stuff for shorterm traders anyways. it resets all the charts we can start to build new bases and patterns from which epic runs can be made.  The stocks like JVA, REDF , so many that made huge runs this year….they all are up 500-600% after they broke out of their bases.  Now this gives us a chance to do it all over.

now todays gap makes things tricky.  I dont like chasing gaps up as you tend to get a dip back at some point. What i will be watching for is whether that gap comes back and fills and then we fade/bounce…  or whether the buy progams start kicking in gear and taking us on a stairstep higher.

we are starting to enter a kunalrubberband setup…just need to confirm on shortermtimeframes

for my watchlsit..ill be using etfs today while i get a gauge of the markets.  tna, tza, edc, edz, uso, uco, bgu, bgz. Typically smallcap terd stocks tend to lag on initial bounces. Ill keep a list ready in the chatroom of some of the more oversold stocks i like as lot of them are ready to rip but timing them will be tricky and hard to see from just a chart as the charts are broken.