Tuesday, April 15, 2014

Potential Intermediate Trend Change

The market tested the 50 Day Moving Average early as I had speculated yesterday and the market sold off to test yesterday's lows only to reverse and test the 50 DMA again. I had expected the original test and the sell off but the hard bounce was somewhat of a surprise. The market seems to be putting in an ascending expanding triangle which in itself is rare and one that I don't recall seeing before. Usually, these sort of triangles serve as corrections so it might be setting up the market for another ABC move to new lows. The Intermediate Trend will most likely go negative in the next session or two unless there is some sort of explosive bullish rally so we might see violent moves in the next couple of days. I lean bearish as long as price action above the 50 DMA is not sustained and until that changes I am looking for lower lows.

I bought VXX around the test of the 50 DMA early morning and had a good profit couple of hours later. I normally would have closed the position as I tend to be conservative with locking in profits but I let it run and at EOD the position became negative. I am however holding it and hopefully I'll sell it on another wild market swing.

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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