With 88% of volume going into declining issues, the $TRIN closing at 2.51, and with $NYUPV closing at 80.76, it’s likely they’ll be a nice bounce tomorrow, but I wonder if it will last through the session. I’m not going to be a hero and catch this falling knife. No. The view from the cheap seats suits me just fine.
On the chart below you’ll notice that the 5EMA just barely dropped below the 10EMA today. The last time this happened was on the 3rd of May. Also notice that all the EMA’s are pointing down. The 5,3,3 Sto is showing oversold so this, too, suggests a bounce of one degree or another and I’ve drawn in the A leg which should follow the obvious M pattern. We also got bearish ADX cross today with the -DI line pushing up through the +DI line. Bottom line, this is not a happy chart.
Edit: This potential sell signal would be confirmed with a close below today’s low of 1309.27, which should happen within the next 1-3 sessions otherwise it’s something else.
Just a note about market dynamics: Well, I was right about the shift in market dynamics where buying the dips was the better trade, and then I was wrong about the shift in that dynamic. I stated that I had misgivings about this flip mainly due to timing and I sold my position in SSO at 51.80. I was being cautious and protecting a nice gain and while I certainly got out too early I haven’t given back one penny of those gains. And that’s the deal. Sometimes you have to get out too early, or it’s too late.
Be careful. Cash is king in times like these.