The little bounce forcast by the futures didn't last too much past the open - and since then the markets have spent the day relentlessly grinding their way downwards. We've hit new lows on the Dow, and the S&P has moved closer to the Nov low retest
S&P and Dow 30 minute charts - Feb 23, 2009 1:25pm
The disappointing move this morning is one reason why I believe you'll end up hurting yourself chasing every little up and down. Best stay with the trend, regardless of the short-term movement. For everytime that it works out and you pickup a few %, it'll end up biting you in the butt and you'll end up losing out because the market zigged when you thought it would zag. Like this morning. As I talked about this morning, use a 3 day chart and the highs and lows in the past 3 days to help determine your trend. In these charts right above, I included 4 days worth of chart - today, plus the 3 previous days which would make up the 3 day bar. Since we're in a downtrend, to abandon the trend would be to go higher than any price already on this chart. As you can see from this morning, the boost at the open never even got close. Anybody who switched to FAS to pick up a quick gain would have gotten burned.
As the S&P gets close to the magic 741 number, watch out for a possible bounce higher in reaction. It may or may not happen, but that is the most likely place for it to happen if it does at all. Once the S&P breaks that 741 low, it will be like Wiley Coyote, having run out of cliff, suddenly looks down and realizes that he has no ground below him.