I knew that as soon as I posted that article with a bullish outlook it would be followed by a day like today, but today's action doesn't change anything other than probably begin a much needed correction and confirm that this market has been skating on thin ice. Hopefully you've used the last few weeks to lighten up on long positions.
If you are short with the MACD signal, then hold for a buy signal. If there is a buy signal off the rising 50dema or 200dema, that would be an exit signal, or if not, then exit on the second buy signal. We will wait and see if other trend following strategies give sell and/or short signals.
Already, the equity only put/call ratio is approaching oversold levels, so this correction may just be a pullback. If the McClellan Oscillator and the EPCR both signal an oversold condition, it may present a good entry point. If you believe this is the beginning of an extended correction or new bear market, it would be prudent to wait for a rally to enter short.
I think oil is headed to at least $105 and maybe higher. Gold and silver look higher too.
1 comment:
Thank you for the Terry Laundry tip. I too was ready to throw in the bear towel and go long but today's action triggered my short ETF setup buys -- which I kept active -- and I made money today. I still think it will be difficult to fight the Fed after this correction. So I'll either stop out with a break-even on tomorrow's bounce or sell in about six days if we see five minute waves down. Then I'll go long.
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