Good day!
Market falling a part in front of our eyes. That is short explanation of Thursday action. Day opened with strong gap down and this time that was kind of bull trap. Since we are in bear market, gap down and trap action had stronger reaction and result is trend day down. When we see 60 mi9n chart it look clear, but if we will look intraday charts then we know how choppy action was. Tuesday support was strong and we didn’t saw strong move down with move-rest-move action, it was rather slow choppy channel, tricky action. On the daily chart we can see that SPY divergce3nce CCI don’t work, but that not mean we wont see triple divergence and that will be my focus. Important is to note that we are using small risk and most of our room action is patience and waiting because I think that this market is not easy for low risk trading and risk is always on my first place. Since indices closed at lows and since they are so weak that even can’t touch daily 10sma we can say that they are in strong move down, and it is 4th week down. To me it is too risky to take any short now so only what I can to is be with cash and wait initial bounce for possible continuation. Also my focus will be again with financials because without financials I don’t think that we can see any serous correction. Financials daily and weekly chart forming 3d divergence and I will look for bottom action. As usual all updates will be in the live trading room.
Those of you that used to come into the trading room and stopped, I want to tell you I am back full time and welcome all of you to come again. There is nothing to lose since there is no charge for the service right now. I look forward to seeing you all there.
Under are monthly charts for INDU, SP and COMPX. Honestly I don’t know how long selling will go, but since this crisis is extremely big I wont be surprised with more selling pressure in the future. Charts are telling us that indices still have room for new strong supports. I know that is not optimistic view, but it is realistic view.
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