Dow 12800 is the bulls final stand. A break of 12800 and all hell breaks lose. Right now I am waiting for a break of 12800 to buy DDM SDS QID . I did add some QLD today in anticipation of a rally into the close. I will sell QLD is the market breaks its current lows.
So far the market appears to have made it lows for the day. But I could be wrong and I probably am wrong. With this type of volatility anything can happen. Anything. Traders are emotional and rumors could send this market flying in any direction. Just look what happened to CFC yesterday.
I continue to hold 40% cash and plan on putting it to use once a clearer trend is established. I know a lot of people are expecting a bounce from these oversold conditions. But the market could easily crater another 1000 points lower. Too many people expecting a bounce is a sure way for the market to do the opposite. On the other hand valuations are still attractive and foreign buyers flush with cash may prop up these markets .
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