The market rallied strongly today after selling off in pre-market after the jobs reports on Friday. Looking at the ES chart, the low over the weekend was higher than its cash equivalent of 2048, so there is still no sign of bulls giving up. With that said, despite the close over the Trend Average and the 50 DMA, the intermediate trend has turned bearish as well so we now have a strong possibility there is a substantial top in place. For these signals to reverse, the market would have to stay consistently above the Trend Average for the rest of the week and I'm not sure the market will be able to. For the first time in a long time, I feel comfortable being short given the lower risk/higher reward situation. Obviously, the market can keep rallying from here to new all time highs but I wouldn't bet on it until bearish signals reverse.
I am holding on to my VXX, which went down quite a bit today. But luckily my oil longs more than made up for any volatility losses as it rallied more than 5%. If oil can break resistance at these levels (WTI 52.50), we could see an even stronger rally.
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Short Term Trend = Bearish
Medium Term Trend = Bearish
Long Term Trend = Bullish
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