1288 is a key level on the SPX and again the daily charts show weakness where the weekly PA needs to find support.
REVIEW As expected, the 4 hr chart worked to give the early direction on Monday for down and the PA never looked back with 5 red days cutting through the 12700 level for another 450 points to add to the short from the top. Before the top I said I was expecting a top to form that would give us the best chance for the biggest move down since the Oct lows and we are not far off getting that. The question now is are we finished? CURRENT There are big support levels showing in the major indices at or near where we are now. The Dow, as per the earlier chart has multiple supports plus a perfect abc inside a channel with a volume flag and the break of that channel gives an easy long. In spite of all this perfection I'd prefer to see the Dow reach closer to 12,200 for a reversal attempt. Across the board we are close to or on the next breakdown level. It makes sense for the market to catch its breath here after 12 red days punctuated by only one green inside day, but like last weekend, I don't have anything to tell me to take action now to change to the long side so I need to see the money hit the market. The daily still looks weak but the volume flag usually indicates we are at or near a bottom and in such a setting if we bounce it is usually the 2nd bounce that is the real reverse long. If the daily channel is broken (it is the easiest guide) for a long I will afterwards be watching to reverse short and then relong for the weekly challenge to the upside. The only thing that would alter that expectation for a 2nd bounce is if we stage an emergency reversal and get a powerful move up; then I won't be expecting the 2nd bounce. The way the PA unfolded with no real challenge to the shorts and so many consecutive downs days into multiple supports means I still need to see the weekly bulls attempt something better that a daily inside bar. If the weekly players are taken out the monthly is in play. Looking at the Transports and the general monthly and quarterly charts makes me think the monthly is maturing into a strong grip on the downside of market and that is what makes me think the weekly upside will fail to save the market. That failure may happen now so I will be looking at the FTSE to see if we get a lead there for support or further breakdown on the triangle and also the Dow channel for a reverse long. SUMMARY We have had a great short and now it's time to protect the gains by using the channel. I don't have any daily up pressure. There are signals to pull the trigger and other times to let the bullet fly and that's where I'm at now, letting whatever comes dictate. As far as prediction is concerned, I attempt to get a pretty tight grip on the next move or wiggle but there are times like this when trading the near term PA until the bigger view is clear for a strong prediction is the correct map to use. We are right at the point of a potential waterfall drop or a fierce move up and the next 2 weeks could be spectacular. The weekly players have every aid here against a backdrop of bigger down pressure and the absence of any immediate daily buying indications usually results in the whipsaw up which is easy to catch or the cascade down continuation. ACTION As I don't have a clear prediction this week here is how I'd play it. 1) Remain short until there is a clear candle signal and the channel is broken. If it is broken look at the speed and strength of the move. If it is weak expect a pull back and then the real move up. If it is strong then expect it to continue for the week. 2)If we get a long signal and the move is weak, reverse short on a good signal and if the base is broken then we are likely on the way down again. 3)The absence of a daily buy cycle means any weakness below 12200 will keep the shorts in play for some time so hang in there. Good trading
Laying here in ICU in the hospital. 4:30 AM, I show your post to one of the nurses who likes to trade, and he says, nope, we're going to be in the red today. Can't wait to hear his response when he comes in to get the usual blood from me. Lol! Looks like xspurt's going to have another follower soon.
Re: above post. I recently had a serious car crash. Broken jaw, nose, two broken ribs, head injury requiring four units blood, surgery, etc., God is carrying me though.
Shit.. not good.. good luck with recovery.. being in that state and thinking about mkts definitely shows a passion !!!
Thanks guys! All will be well as soon as I can get my short term memory back to speed. I asked the neurosurgeon when I first came in, "do I have a pretty bad concussion like the NFL guys get?" He paused and said, "I wish yours was." Nice response huh? Got my attention hearing that, no question:eek: Anyhow, no worries. God is carrying me. I'm out if SICU (Surgical Intensive Care Unit), and am in a private room now. Never used this iPad 3 much until now, and gotta admit I like it. Lol! i Don't want to go off topic, so back to t/a. But again, thanks guys!
If you need to, or can at all, ask for some cognitive rehab. That field has really improved, and has some excellence helpful even if you don't have much wrong brain-wise. I had a brain injury and had to push a bit before my Dr would OK getting the therapy, but the rehab really helped. All the best. ...oh, and trading is one of the best therapies! LOL