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Today’s starting out a lot like yesterday for me: a bunch of short positions, almost all of which are doing fine, and then a total dud or two. Yesterday’s bomb was STI. Today’s was G. Ah, well. You take the good with the bad. It’s still a good day so far.
Of particular aid are the financials, which seemed to have obeyed resistance quite nicely:
Since maybe Thursday’s selloff gave me permission to show some favorite short setups without embarrassment………..here goes:
The market was all over the placed today, and I noticed on my /ES chart a horizontal line that seemed to have significance. I was so occupied today I didn’t bother trying to figure what it was while the market was open, but it bounced off it (green tint), fell hard once it slipped beneath it (cyan tint) and then went zipping back up to it right up to the close (magenta tint).
My apologies for the lack of an update last week, which was particularly busy. Today I’m going to do a multi-timeframe review of where SPX is now, and the implications longer term of this seven week uptrend having risen this far.
Just to mention, we are doing our monthly free public Chart Chat on Sunday, and if you’d like to attend, you can register for that on our February Free Webinars page. We are also starting our next four week Trader’s Boot Camp on February 18th and if you’re interested you can register for that on our Trader’s Boot Camp February page, though we do charge a modest fee for that of course.
One thing I was talking about was the importance of the monthly close in January relative to the monthly middle band. Historically this has been very important resistance after a serious bear move has started, and since 1957 every clear monthly close back above the monthly middle band at this stage has always delivered a retest of the all time high before any serious lower lows were made. We saw that clear monthly close back above that monthly middle band at the end of January. That high retest has sometimes made the second high of a large double top of course, although on many occasions that has been the start of a new leg up. (more…)
I have mentioned MetLife (MET) many times as an attractive long-term “sell”, since it has broken its major uptrend and has exhibited in the past a tendency to fall hard after well-formed tops.
