Monday, September 20, 2010

Holding Forever???

I think not. This is why I'm very hesitant to go short until we get a very clear break in the trend. First lets take a look at the overall market and see where we are. I only trade the S&P 500 at this time, but knowing where the other index's are is important as well. This is not a public chart of mine, but have used it in the past when we get to a critical level. Now I'm looking at the 6 month drop and how the current price is related to that via fib. retrace.

One focus is the 61.8% fib retrace and where these other indexes/sectors are into relation to it. RUT has some room but topping, along with NASDAQ. NYA also is showing a very interesting resistance line that we are getting to. XLF has a little more room left before we reach it's critical resistance.

Here is a look again at the SPX and my current (shortest chart out of the charts of 3's [30,60,daily]) If you notice you get a break in bearish divergence. I never really clearly defined this before, but in this chart you can see that it is clearly broken. If you look at my daily chart (see right side for my public charts to see) You do not have this happening. It's just starting to roll over and reaching the previous high (for CCI) for example that shows bearish divergence. It really depends on how active of a trader you are, but you can see on the chart below (30 minute) that you also have High and Low risk exits on bearish divergence break. I am still holding cash waiting for this trend to top and the trend line to break.

Bulls have won a very strong battle at the 1032~ish mark and I look at that as another level of support to break to get a correction from this most current rally.

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