LET'S WORK THIS OVER THOROUGHLY
Now that we have had that 2 day bounce I was talking about, let's review whether or not this has presented the shorting opportunity I had been waiting for. First, both accumulation/distribution indicators are heading down sharply leading price, that is bearish. The short term momentum indicator is still under it's trendline, but is heading up sharply, this is not very bearish at all the way it appears right here. The next panel is the longer term momentum indicator, which is still nicely below it's downtrend line, which is also bearish.
The final panel shows a much longer term momentum measurement created by Larry Williams. This does show a rollover happening here and a reaction back up against the new down trend. This is also bearish, except we are not quite into the sell zone yet. We do need a little more upward movement to get there. One more up day would do it.
In summary, for the most part the sell setup is here but it is not perfect. At times like this I try and look at individual stocks and the VIX to help be a tie breaker. Most individual stocks are not into good sell spots yet. The VIX below is also not really giving us any actionable signal at the moment.
Remember buys in the VIX are sells in stocks. We do have a possible buy signal here as well as a few developing. The VIX itself needs to travel quite a ways down to penetrate the bands at the bottom and go into the buy zone. The second panel also shows us not quite into the buy area. The last panel shows us basically there right now if we turn back up.
In summary, when weighing everything, it appears to me that we are not quite into the sell area yet. However, the market does not always tip us off perfectly, so I will be selling breaks starting now and trailing upward. I do not want to miss this move even if it means getting picked off on a fake. I think the upcoming move if we start going back down could be a good sized one. It is possible we just lift up some more. The last 2 days are more refective of most of last year, just slow drifts up all day. As long as that is happening there is no need to fight it. Be prepared for Lucy to pull the football away from Charlie Brown here at any moment. You don't want to fall on your ass like he has over and over, when this rolls over. There is a shot for us to hold here based on the commercial buying into this low, but this low just made needs to hold. If it does not we could go down sharply.
The BOND trade I mentioned for Tuesday was not elected, so I have orders in again for tomorrow on the short side again below the market for entry.