RUBBER MEETS THE ROAD
Here we have the Naz, the weakest of the US Stock Indexes basically at a key support point. For you Eilliot Wave counters, we have a very clear A-B-C correction with good symmetry. Today we also have a big POMO day, which have been big stock manipulation days by the Fed. We got the good down move overnight on news, but will it stick with the PPT likely to be active today? This should be very interesting to watch. We are in a logical place for a bounce, and a logical place for the government to launch futures buy programs through their stock market manipulation. If they can't hold it here on a POMO day that really tells us something, and not a good something.
Just from a short term perspective, this is a key spot. There would be no question that if we were to close below the support level marked on the chart, the short term trend will have turned down. In my view it already has, and I am looking in the next day or two to get short the stock indexes on a bounce if we get it. If that bounce continues to carry forward to the upside, I won't get short. I will just have to watch the price action to see how it plays out, but I have a tentative plan.
I put the Wave count up just because it was so obvious, or is it? I have not made a trade based on Elliott Waves since giving up on that idea 20 years ago. However, at times the symmetry in waves is very interesting. The problem is always there are always 2 alternatives in wave counts, one that indicates buy and one that indicates sell. In this case we could have a wave 1 down where A is and a wave 2 up, and we are now in wave 3 going down. The question then is are you bullish or bearish? Net net, it adds nothing to the game. It gives you a coin flip option, as the waitress in Caddyshack said, "Tanks for nuttin."
The Oscillators I use are showing down, but they always will when price moves down this much. We are getting some short term divergence in the top one. However, ADX is increasing telling us this trend has some integrity since it is increasing, so I am ignoring that divergence. That of course is a judgement call, but so is life so get used to making them. In summary, I am looking to short a bounce Wednesday, now it is time to see if it sets up for me. I still am short several stocks, so I am participating in this decline even if I don't get in the indexes.
Here is one of many markets now setup for a short entry, GOLD.
We have been diverging in the momentum oscillators for awhile now, and we appear to be having a bounce or retest that is losing steam. I am looking to short this or Silver tomorrow or Wednesday depending on the price action. Siler has been stronger by far so I am leaning to GOLD, but the short term price action seems to be shifting a little back in the direction of more weakness in SILVER. That will be a game time decision as to which one to play. I like the price to drag me into the trade instead of picking points in space and entering there. I suppose if you were really bearish, you could play ETF's here and just work your way into the trades with market entries, but that is a bit dangerous against a trend this strong in my view. I was traveling recently and talked to a dude at an airport who was really bearish on SILVER and was buying the ZSL etf, which is the inverse SILVER stock ETF. It appears he has caught this well, although for all I know he bought in a month ago and is way upside down. I doubt very seriously he caught the high. In any event, hats off to him, he is about to cash in it appears. This could fall sharply if it gets going.
The last market for today is Bonds. I have marked on the chart where we were when I posted that chart showing we should rally, and we have.
If you have not gotten long here yet, buy the next dip, we could have a nice run coming here especially with the trouble it appears stocks are in.
That is all for now