The good news is that there was no follow through on the buy side. Classically, when we have a strong thrust up at the open, followed by a sagging flag, it is a safe bet that we get a second rally. Not today. Even the close was just short covering. Look at the chart.
We blasted off, exhausted and just creeped lower. We seem to be bouncing along the 50% line. In fact, I was surprised that the inverted cup and handle did not cause a break lower - as I would have been happy to eat my words about the 1103.5 support level holding.
Anyway, the pattern seems to be playing out in the futures during the early part of the session. I have a position, but may close it out with a small profit. Not sure what to expect overnight and the morning.
I do believe that shorting every rally is a low risk scenario.
Good luck out there!
3 comments:
David , Three weeks in the row now the $ gets pounded down on Sunday night and we rocket out for 12 to 20 points out of the gate .
Not having broken under the last leg up start, 85ish, I was worried all the after top action could have been a wave4 leaving a whole leg up to go. That looks unlikely now .
The center of the 20 point down and 20 up today , is not a cup and handle because the bottom is chunky not nice and round ?
Interesting roll over in oil and move off the highs in all commodity , out of proportion with the $ gain .
Of note Prechter recommend to go 200% short. today .
I think there is a down channel forming .
Lets see what happens ,
Good Luck
The Vix R Factor has suggested that we have been in a consolidation phase for the past two trading sessions. No new up or down short-term trading channel has formed yet.
I may take some positions tomorrow and more on Friday. I have been close to flat since last Friday. I think we could go up until then.
I distinctly remember what happened last year during Tgiving week. melt up wed and fri, then crash on Monday. I will try to have a nice short position by the close Friday, fwiw.
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