As I suspected…

As I had mentioned in my blog post from last week, the market did bounce and has kicked of the week with a huge rally.  Typically of these massive gap up’s at market open, the market tends to trade in a flat line for the rest of the day.  So there was no point in trying to buy into this at market open, as it was only ever going to exhaust itself in the morning at 9:30am and then dip somewhat by close, we are not at close yet, but that would be my expectation.

When I saw the S&P Futures this morning, I thought there had been a typo on the CNBC Pre-market futures webpage.  (http://www.cnbc.com/id/17689937/site/14081545/).  For the futures to be up over 30 points before the market opens is very rare.  You see, you can tell approximately where the market (represented by the DOW in this case) is going to open by keeping a close eye on the S&P Futures in the morning before market open.  The rule of thumb is:  For every point +/- the S&P Futures are up or down, you take that number and times is by 8 to get an approximate estimation of where the DOW is going to open. Good to know!  So this morning, I knew the DOW was going to open up around 240 points (8×30), and so it did, so all the stocks on my watchlist had a gap up too.

Now that all the stocks that I watch are showing strength on the back of the rally today, I will be re-entering the market at full tilt from tomorrow morning, setting up all my trades today after the market close.  This could be the start of a really nice bounce.

My today be a profitable day…for all of us.

John