Depends on whether or not you think that churning was distributive. If so, any rally will likely be an opportunity for further distribution. Since we're at the last reaction low, it's reasonable to stall here. Now how far can we retrace?
IMO, every rally from here is suspect & defense should be on the field. I don't know what you track but every indicator I follow suggests much more risk lies with the bulls.
******* I use multiple moving averages as my trendlines;good thing we all dont use the same trendlines. My read is the bull market that started in March is just getting started. Comments apply to DIA ,SPY, QQQ,JNPR,CSCO,IBM,DYN and so on . Sold longs[ most of my short term trading account ] 5/19; long again5/20. Trading time frame is a bit longer for me in a bull market;you may have noticed buyers came back in ,even with an upgrade in homeland security lately. *************************************************** Thank God I covered my IBM shorts in afterhours- thats an accurate paraphrase of Steve Cohen from Schwager book. Timely in a bull market.
I only track 2 indicators.. price and volume... Price is an uptrend.. and volume is looking pretty good. Actually the risk is with the bears...
Every single profitable professional that I know only trade with the trend... My point is that if the market is still in an uptrend.. I would be mainly looking to go long.. and possible short a few weak stocks to hedge... The risk is always greater fading a trend.. then riding one... Its a known fact and has been proven many times over.. One of the main reasons is that the majority of the time... bad news begets bad news and vice versa... Unexpected announcements are usually alongside the direction of the trend... --MIKE
Just to clarify... In the intermediate term we are clearly in an uptrend.. until we rollover and make a lower low... In the very long term.. we are still in a bear market... I trade daily bars.. not weekly... therefore my main concern is the intermediate/short term trend... If we were both in a long and short term uptrend.. my account would be fully leveraged to the longside.. Since we are not.. I am selectively buying and trailing profits tight. --MIKE
Corso, I won't attempt to pull your chicken, but I don't use that chart to time anything I do. I just keep it overhead and take a peek at it every few days to see where we're at. Personally, I time my trades specifically off of key S/R levels via the price charts.