Today's final hour of
trading was crashtastic. And …
considering that today was the last one of the quarter, today's distribution
and selling was clearly institutional and most likely correlated with
redemption selling by professional funds.
1040 is gone! Here is an $SPX
daily chart to help orient us to some of what is happening.
I would strongly
point out the increasing volume (e.g., distribution) on the day. The PVO indicator has turned up while prices
declined, confirming a distribution day.
I would also note
that the $SPX closing price held the October 2009 low, so I will now be
watching the series of monthly lows from July 2009 to October 2009 on this
chart. Each one is now functioning for
me as a short term trading target, as this market grinds down, confirming the
continuance of the selling we have seen initiated so far this week. I would concurrently note that the 9758 area
of the $INDU (long noted by PussyGalore) is still holding (also).
This evening I will
be watching the overnight market reaction to today's selling, and I expect a
rollover by the Euro now would unleash more downside for our domestic markets
(and help out my precious metal shorts, both currently slightly red). I am also watching former leaders (like I
posted last night) for clues about the market's continuing weakness (including
financials, real estate, retail and cyclicals).
For myself today, I
took profits on my SPY short position entirely too soon (even though it was
intended as a day trade), but I am still holding everything else that I entered
short near the lunch time highs today. I
like to do a combination of day trading and swing trading. This strategy keeps cash available (each day)
for new entries, while adding capital to my main trading account.