The market gapped up this morning in yet another sucker's rally. Notice that prior to the trend change dips were being bought into but now we are having rallies that are being sold into. This shows lack of confidence by traders and it supports the case for lower prices for equities. The trend average has dropped to 1383 and unless there is a surge in optimism, the TA will dip below the 50 day MA and that will change the intermediate trend. So I expect a sell off as soon as tomorrow to test/break support and continue the bear trend for the market.
I also wanted to do a follow up on the bear flag. Like bull flags, usually targets for 1 to 1.618 of the "pole" and despite today's early morning gap, the bear flag target was actually met when the market put in the 1365 low. Interesting how this worked out..
Last but not least, I did a SDS trade which should buy my starbucks coffee for the next 2/3 months.
TRENDING WAVES PORTFOLIO
Why did you sell your SDS if you think there is going to be a drop tomorrow? Great insights! Thanks.
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