Monday, April 14, 2014

Possible 50 Day MA Challenge

The market put in a bottom in pre-market that was not seen in regular trading hours and that low tested the 1812 equivalent before rallying in 5 micro waves to 1834 before reversing to test the recent cash market low of 1814 and bouncing right back from there. The SP500 looks like it is either putting an ABC correction before resuming a strong bearish wave or is starting a bullish impulse with the strongest wave coming in tomorrow or Wed at the latest. The problem however is that the low in the NASDAQ (which has been leading the sell off) was breached today so that count can only be an expanded flat (ABC move) and the SP won't be rallying without the NASDAQ. So despite the fact the market has bullish signals that points to a test of the 50 Day Moving Average at 1845 to an Inverse Head and Shoulder's target of 1855, I wouldn't bet on it just yet. In order for bulls to retake ground lost and turn things around the market will need to make it to 1870 before correcting.

I had pretty good day today with my weekend holdings, which I sold at the high, bought at the low and then resold towards the end of the day. I did however buy a VXX position around 1825 but closed to position trade, so I won't count it as a loss (minimal loss anyway) until I give up on the position so I ended the day at (+30/-6). So far I've milked this thing for the past couple of weeks, call it luck or just simply good market timing :)

Short Term Trend = Bearish
Medium Term Trend = Bullish Trend being challenged
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

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