I happened to be off the radar on Friday, with no account access. That’s probably for the best, as I most likely would’ve broken my own rules, threw my spine out the window, and covered my XRT position. But, as luck would have it, I was unable to wuss-out, and was around to ride the drop today.
So I think I recall seeing a couple posts today talking about the light volume… backed by IBD’s article header: U.S. Stocks Fall Hard In Soft Volume. So where was the volume today? Looks like (some of) it was in XRT- an 86% volume increase above the 15 day average, on a -2.5% down-day:
Note that this presently looks like nothing more than the aforementioned short term hop- to kiss the underside of the cloud- only to drop away.
Both the MACD and RSI continue to look anemic:
I think the pattern remains lame, so unless I become pithed for some reason, I’m sticking with it. As I said before, I'm not in deep, but hope to be on a break below $34.50.
…and no sooner do I post this than I see this Barron's post: Retail Stocks Headed for a Markdown
Today's sharp 2.5% upmove in the Shanghai Composite from Friday's close shows that the price structure held above — and lifted off of — its prior (Aug 13) pullback low at 2564, as well as near-term MA support in and around 2610. Today's up-move and close near the high of the day positions the China equity index for another test of key 4-month resistance at 2700, which if hurdled and sustained should trigger upside continuation towards an optimal measured target zone of 29.25/50, and possibly as high as 3000 to 3100. At this juncture, only a decline that breaks Friday's low at 2589 will compromise the current constructive technical set-up.
The DIVERGENCE between the patterns exhibited by the Shanghai Composite on one hand (bullish) and the cash SPX on the other (bearish) is widening. My thesis is that China peaked first last year in August 2009 and led the rotation of global equity market peaks into 2010. The China equity market appears to be leading the recovery in equity markets out of corrective periods, which eventually should benefit the SPX. The SPX must preserve Friday's low at 1039.74 and climb above 1072 to get traction on the upside.
Originally published on MPTrader.com.
I started today relatively "light" with 90% commitment and 144 shorts. I have added positions and am now 118% committed with 157 shorts, 3 ultra-shorts, and 10 longs. The longs, and their stops, are: