Today was a really good day for me. As I indicated, I took profits as quickly as I could on my "lottery plays" and I closed out a fair number of my regular long positions. I also amplified my shorts, particularly FAZ.
The /ES is my general guide to what equities are going to do, and the shooting star on this daily chart indicates more weakness to come.
The core question is……….what happens at the ~730 level? Do we bounce? Do we plunge into the abyss? I have no idea. I will almost certainly trim certain shorts at that level – – particularly my NQ and ES shorts – – but that line in the sand is just that – a line – and not a brick wall. But it is still an important technical level to keep in mind.
Whether we get the green arrow (a bounce up to 800) or a blue arrow (a plunge, thus wrecking all the beneficial bullish construction that has happened recently) remains to be seen. But I think we'll have our answer before the week is over.