Monday, April 7, 2014

Short Term Trend Confirmed Bearish

The correction on Friday was expected after having a 5 wave move completed that day. However, the lower low made today wiping out all gains from that 5 wave count came as a surprise to me as bulls had the momentum after all the seemingly negative news had failed to produce even a 50 DMA test. But today's low changes the Short Term Trend to bearish and unless the market rallies hard above the Trend Average, my guess is that the Intermediate Trend will change as well. The market could still put in a new high and form a Megaphone top or it could just rally to the TA or the 1874-83 area and then reverse to put in lower lows. Looking at the micro count, if 1841-52 was W1 then I am expecting 1870 as the target and a good spot to start hedging.

I didn't get a chance to position trade the XIV I have since I didn't catch the first support level that broke. But since it didn't really go down all that much either I think I can still make a profit on it on a test of the Trend Average so maybe we'll see the TA tomorrow. Whether the market can recapture it is another question. I will probably start loading up on VXX at resistance to hedge my long positions, which actually have been rallying.

Short Term Trend = Bearish
Medium Term Trend = Bullish
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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