The market tested the 50 day ma as I predicted yesterday and the selling started once that point was reached. What remains to be seen now is whether the market is going for the 200 day ma by breaking 1405 support or if the market intends to rally back up to 1434 to close above it. As I said yesterday, I lean towards the market turning bullish but it does seem like there is a missing down leg so perhaps the market will retrace to the 1420 area before breaking through 1405? pure speculation obviously but now that the parameters are set, I can buy some stuff next week. I'm probably going to buy VXX is we get that retrace to the 1420s area with a stop at 1434. Or I'll be a buyer of XIV at the 200 day ma. China and HK continue to rally so we'll see if that gets affected at all next week, I will be ready to start taking profit there fairly soon but leaving most of it intact for my Easter Island trip :) (That Shanghai index is going for 10,000 before the decade is over). Also, gold is finally in the Fib retrace area and I will be picking up some at the first change of trend as I am betting on the cup and handle pattern there.
Long Term Portfolio: 100% Long (Emerging Markets Only)
Short Term Trading Strategy: Sold XIV position from 10/19 at $16.10 (there goes my coffee!) - Bought XIV @17.64 as of 10/19.
Have a Great Weekend!
Btw, here is an article by EWI about moving averages (they are the LAST ones to actually follow MAs but maybe it has educational/entertainment value)..
Moving Averages and the Wave Principle
Improve your Elliott wave pattern identification skills with this lesson from Jeffrey Kennedy
Elliott Wave International
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