Finally!!

Since I already elaborated on the implications of the Dow rising above 11,587 in my previous post, I’m going to get right to the point: First, I think it is fair to announce that we eliminated the former heavy weight champion with a knock-out punch in the 12th round today. Unless some miracle happens tomorrow and both Nasdaq and the S&P immediately retreat at the start of the bell, we are officially still in wave c (circle) of Minor 2. Now, would I bet my first born on that this is never going to happen? Probably, but I’m a horrible horrible person, and it gets even worse during trading hours. But unless that happens, let’s assume that these remaining thresholds will be crossed tomorrow, most likely in the first few minutes of trading.

So, here is where we are tonight:

Dow in wave c of minor 2.

We see an initial target here around 1294 at 38.2% retracement, which seems a bit low to me, but it would be acceptable according to the rules. The next soft target is around 1320 which is at the 50% retracement. There is a chance we may rally all the way up to $1350 at the 61.8% level, but that depends on the strength of tomorrow’s market action and if it lasts more than a day.

So, assuming this plays out as expected, what are we to do? Buy some spiders or some cubes? Well, I already grabbed a few cubes in anticipation of tomorrow, but the smart play may be to focus on ‘short squeezed’ stocks, which already pushed up hard today. Here’s a list of my personal favorites – take some of those and cross check them yourself over at www.shortsqueeze.com:

SYNA (my personal favorite), URBN, MNTA, CNQR, BIG, GEOY, CHTT, ARO, CYBX, APWR, WRLD, TSCO, UA.

I pity anyone on the opposite side of my trades tomorrow – plan to be extra evil and inflict some major short squeeze pain. Booo-yaaaah!!!