Price Stabilized / Not Stabilized? (by Faces In Cabs)

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Technically, I have my attention on volatility this first week of August.  I saw lots of predictions over the weekend of how far down we might go (and many varying levels to watch).  I shared on the weekend that I am watching 1082 for the Russell 2000 (the bottom of a double top pattern range).  This seems reasonable to hold forth as a pattern-based range.  We may test that support level this week (and we may not).  I noticed that many missed this chart on the weekend, so I share it again below.  I basically see 1082 as a “ledge”.  If the Russell 2000 price firmly falls off the ledge, then the range is finally broken and odds are essentially WATCH OUT BELOW, because the markets have not seen trading below 1082 since October 2013.

Russell 2000 Weekly (worth watching for downside leadership)

With the shock event still in play, bears have the edge in the short term.  Personally, I mildly shorted the market again on Friday afternoon (and yes, that includes an IWM short).  Honestly, the markets can still go up BUT price needs to stabilize first.  I did attempt a long IWM trade on Friday off the mid-day bottom, but quickly discarded it before the close.  Market prices seemed to hold like quick sand.

Market Notes

Starting a new week as market price remains destabilized

  • 2 consecutive prior days of higher volume selling
  • Upward trend has NOT changed
  • Looking for shock more events on MAJOR news events (e.g., a country going bankrupt)
  • Continued market pull back is VERY possible
  • Volatility on high watch
  • August POMO starts Monday (8/4/2014)

Trading Ideas

Here are three stocks that I am considering shorting into resistance.  They are now on my radar.

ARGT (Argentina ETF, but recent bounces can be wild)

GS ($XBD, broker-dealers, quickly filled its large Wednesday – a false break out)

IBM (Big blue has lost its leadership)

This is my fourth blog post, since returning to Slope.  With my bearish paws together and a slight bow of my head, I once again bid you “Namaste” and wish you “Good Luck” with your own trading (Luck = Preparation + Opportunity + a little Risk).

By FacesInCabs