Still in the game. Holding Short!

Even though we have gotten 2 new highs since I went short, the divergence is still in tact. Topping takes some time. I was hoping for us to break down to the daily MA's but we still have some positive momentum that needs to be shaken out.

Step 1 down

It was a rough battle but the bears took control and broke the first support barrier @ 1132~ish. On the 30 minute chart were looking over sold so I expect a short correction up to the 1132~ish range and would like to see that the bears hold that line in the sand. Step 2 is underway after that.

GAME ON!!!!!!!!!

I entered short today after the very long time holding. First I would like to take a look at the bigger picture before we get in the the micro chart of the trade of 3's. The 3 chart time-frames are (daily, 60 minute, and 30 minute). I'm not going to post the daily chart, but take a look at my public charts if you want to see it. The main thing for me is that you see bearish divergence on the CCI (20) on the daily and RSI is topping at 70. A lot more information is in the 30/60 minute charts. This is a "type 2" trade. If you want to know more about this type of trade please see my notes on the right for more information.

Ok, so big picture first. Here is a very extended 60-minute chart to capture the full picture. I see a down turn were we are held within the MACD trends. Also if you look at the average over the last 4 months of the ADX the + and - DI have reached topping and bottoming levels. This is definitely overbought based on this history. You also see my target exit that also falls in-line to a retest of broken resistance trend and also the 50% retrace from the most current rally 1040 - 1150. You also see a very similar pattern in the RSI from the last trend change.

Now for the micro chart, the 30 minute chart. I might of got in short too soon, but I took the risk. the 1130~ish HARD resistance line from previous highs now turn support needs to be broken. Also you have a very solid up trend in place still. Tomorrow we have some very tough levels to break if we head down. (see chart, yellow spot for tomorrow), If broken I see us heading down to the MA's ranges. I'm planing on an exit near the 50% retrace but the 200/150d MA range is another touch zone to break. If your low risk and are following along, this might be a good exit at the 200/150 day MA range to see if that is broken. Play the risks as you see fit in your trades.

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.

Holding, Take 3!!!!!!

200 and 150 day MA's (1118~ish) seem to still support the market. 1118~ish is also the trend line support channel. If broken expect a down wave to end around 1110~ish, support from the weekly MA's.

Still Holding!!!!!!!!!!!!!!!!!!!

SPX has broken one critical support trend but is still held up by the second. Entry into a short position at any point here is possible with higher risk but i'm waiting for the second trend to break. Notice that we are now riding up the broken support now turned resistance. This is a major warning to the bulls as a topping process. I'm not saying we will not get a new high before the correction but the bull side is very risky at this point.

Holding !!!!!!!!!!!!

This bull run just doesn't want to stop. We got some top resistance @ 1130~ish. I still short on WSS but holding for this trend to break to go short with real money. We have broken past the 200 and 150 Day MA's @ 1118~ish. That will act as support now so we will have a 1130-1118 bounce around until one is broken.

HOLD!!!!!!!!!!!!!!!!!!!!!!

Chart update on current trade setup. Not ready yet, but it's getting very close.

New Trade Setup 9/09/2010

I am currently short in WSS but am out in my real cash trade account from the break posted from the chart below. I will re-enter short when this trend breaks. Looks like were in a tight gap for trading Top 1115 - 200&150 Daily MA's + 150 weekly Ma.. Bottom 1080~ish with the 10/50 daily MA's. Also 1080~ish is the 38.2 retrace from the 1010-1130 rally run. 1080~ish is alos the 50% retrace of the most recent 1040-1010 rally + support channel. Look for the market to flip over soon to get to that 1080 test. From 1080... I give it a 60% change to go lower and 40% chance to new highs past 1110. I'm betting the the 1115 holds out and we test the fibs from the chart below.

Wave 3 Ahead?

It is possible with my preferred count that we are in a strong wave 3 pattern which will take us to the 950 range as big blue "C" completes.