Short Or Long Industrials & Rails

XLI 11.10.09Small capital risk in shorting XLI tomorrow at the open on this rectangle pattern with a stop above $27.60 and if it holds, the downside target of $25.30.  Note while rectangles as generally a continuation pattern, please note todays Doji.  I feel current market indecision will take it back down as it has the last two months.  This move may not seem like much to some, but I’ll take a 10% move in 7-10 days anytime and twice on Sunday 🙂

KSU 11.10.09

Another area for possible shorts are the rails.  Most are forming megaphone or rectangles which like the industrials, formed Dojis today at upper resistance.   Good area for a low capital risk short trade.  In KSU [right] I will place my stop above the swing high of $27.60

A last note:  These formations could also turn into triple tops or if they break higher here with volume, deemed double bottoms.  I am merely going with the current market indecision on   attempting to short them rather than long.  If you feel the market is going higher – go long off the formations.  Just food for thought.

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