Well I said I was going to go against the original move, which was clearly up, and I did. I am a little underwater right now, and I probably should have waited for a much better entry, but I had to leave and I placed my order. So currently I am short the SPY, and I plan on selling tomorrow sometime. It was not exactly like I imagined today. There was a lot of strength out there, but also some strong signs of selling. We did not convincingly take out any trend lines, but we are definitely closer to the down trend lines. The next two days will be key, I think they will show if there is enough strength to breakout, or if the trend lines will hold. Let’s look at the charts:
The 200 ma is still offering support, but really it is moving sideways here with no real direction. Another day or two of this and I think it breaks to the upside.
I still think the DOW is setting up for some cliff walking action. If we stay beneath today’s high the next day or two, then I think we are in for another big down move.
You can see the SPX still has a little more up room left to reach that down trend line. It also looks like the RSI needs to move up a bit to make some more room for selling. Now nothing says it has to get up to the trend line, it just seems logical to me.
I thought the NAS would be the weakest indice today, and it was. But it was stronger than I thought. Still it hasn’t clearly broke through that up trend line, and I still think it is in play, especially with this doji star today. I would expect a sideways or down day tomorrow.
It looks like the UUP wants to move down to the 200 ma, which makes sense to me. But sense has no place in this mkt., as I should know by now.
I love the re-test trade, and this is a re-test trade. It is not perfect as SRE did not drop too far after breaking through the 200 ma. But I still think this is playable to the downside with a clear stop right above the 200 ma. Or if you are feeling frisky, you could put your stop near $51 at the top of that gap. If it makes it there, another great short spot.
MRK is etching out a pretty clear support line at 36.45. It may have enough gas for one more bounce, but it looks like a break is imminent. WATCH out for earnings in a couple days.
MNTA is simply moving up in strength up a trend line. AGAIN WATCH EARNINGS!
In closing: Remember we are at the tail end of earnings season, so before you make a trade, check the earnings date. This is on of my favorite features in Prophet charts, and that is why I leave so much space to the right. I am leaning towards another drop, and I think when we do, it will be a big down day. That is why I am willing to short early and hold looking to catch that big move. Trade well and prosper. AKOT
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