Economic Reports Due Out (Times are EST):Leading Indicators (10am)
The Breakdown:
- Futures are moderately higher.
- Asia traded down about -1.3%, and Europe is trading in mixed fashion.
- Yesterday’s price action was very significant because we broke decisively out of the triangle that the S&P had been forming over the past month or so.
- As a result, we should move much lower from the current price level that we are at.
- We also closed just a shade above the triangle’s lows, if we can break that level, the S&P will be completely disattached from the wedge pattern.
- We are currently sitting on significant support found at 1215, and then after that it will be 1206, which is where the rising 50-day moving average resides at today. After that, look for 1190ish.
- Volume picked up in comparison to the last 3 days, but was still below average.
- The S&P has provided us with clear direction, and rips higher, should be opportunities to sell/short.
- Yesterday provided us with a 10-20 day MA negative crossover. Last time this happened (back on 9/20) we saw a significant amount of selling that ensued over the next couple of weeks.
- Even if this market decides to continue marching lower, you can expect a ton of rallies throughout, before it gets to where its going to settle. If you can stomach those rallies…fine. If not, you need to become a pro at consistently covering in weakness.
- Worth noting as well, is the obvious head and shoulders pattern forming on the weekly chart. Should this be the case, I’d expect then that this market is reaching a short-term top very fast.
- Make sure that whatever you do, that you protect the gains that you have, and be ready for sudden and quick reversals in this market.
- My Conclusion: With the triangle out of the way, I expect to see some great shorting opportunities going forward.
