The SPX is trading in a triangle. Until that breaks out of the bottom or top, we’ll stay in this range. When it does break, those not following the trend will get squashed.
Seven bars down, with the final candle on 10-10-08 a spinning top. Two trading days later, another spinning top. Not surprising we’ve had a week of indifference between the bulls and bears. Soon to change.
The 60-minute chart clearly shows the tight triangle formation. Price has now touched the bottom trendline three times. If we bounce here, there’s a strong possibility these lows will break. Triple bottoms do not hold. As I’ve mentioned before, the advancing stocks on the recent 10-16-08 hammer were not impressive. Put/Call ratios aren’t close to extreme here either.
I’ve lightened my trading here. There was a good pattern to last Thursday’s 15-minute chart. Since then, it’s been choppy.
We could easily bounce. I’ll look to buy QLD, but if a bounce occurs we’ll likely have another round of panic selling. I’ll be gone Friday and Monday, so may miss some excitement. Be wary of the bear.
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Excellent comments.
(Why subscribe to MSNBC?)
Thanks. I’ll be trading 1/2 the day today Friday, and miss Monday, but will be placing a few lowball bids in a 2x long ETFs. QLD UYG SSO UWM.