Now, where were we?
Oh yes, in Part 1, we covered the run from the bottom of our range on August 19th through Friday, the 26th, the day of Bernanke's speech. Things were very much going according to plan and the Dow had climbed from 10,800 on the 19th back to 11,284 at Friday's close - bullish enough that Saturday Morning I put up 9 of the 12 aggressively bullish plays (13 actually) that we would call the "September's Dozen." Unfortunately, they came with a caveat:
What we’re looking for is simple, a repeat of the action we got last year coming out of the Jackson Hole conference so we’ll be making some of the same plays with a couple of new ones as well. Keep in mind that THIS IS OUR PREMISE – we expect the S&P to go up from this line (with, perhaps, a rocky start the first week), certainly not falling below our -5% line at 1,173! We expect the Dollar to go down from 74 and TLT to stay below $108. If these things don’t happen – then our premise is blown and we DO NOT want to stay in these trades – as they are very aggressive.
Although the week did indeed start out VERY well, we topped out at 11,700 on Wednesday, re-tested it on Thursday and proceeded to give it all back, all the way back to 11,240 on Friday and, currently, our futures are down another 2% on Monday night. Remember, we expected a much better reaction than we got so it will be interesting to see how we handled it during the week:
Monday Market Movement - 1,300 or Bust (again)
We have often used S&P major support lines as make or break targets.
