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day trading outlook

Yesterdays 400 plus point rally in my opinion was nothing more than short covering. The new trader will automatically think a big up day is always big buying. You have to analyze data in relation to its price action.

When you hear “short covering rally” it means the commentator is trying to tell you we are in a down trend. We will most likely get follow through to the upside today and then I will be looking for a spot to get short again.

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This entry was posted on March 12, 2008 at 8:50 am and is filed under Lessons from the trading floor. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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