Here is the weekly Bernanke 500 with a pattern I had mentioned recently labeled SELL PATTERN. There is no real magic to this other than it is just bands that contain price ( they can be anything Bollinger Bands etc.. ) and a clear break of them, followed by a reaction. When these initial breaks occur typically the retracements setup good entries in the direction of the break. In this case that would mean another decline should be coming. The dilemma here now though is that we also are bouncing off the 200 day moving average which alot of institutions monitor very closely. I had mentioned that as long as we held the 200 day all hope was not lost, we did.
I know few on Wall Street want a break down here and neither do I. They will defend these levels with all they have due to what is at stake. If the stock market were to roll over here, all bets are off as to how far it could fall, and that is not politically expedient to say the least. Here in lies the quandary and why I am calling this an inflection point. We have what should be a sell zone right about where we are, and also what should be a support zone underneath. The move out of here is going to be decent I think, especially if it is down. Even if it is upward it still could be a good sized move. When this setup fails the move is usually good size when the trend re-asserts itself.
Net net I am not completely clear in my vision here other than to say the first look to me is for sell signals up here. If we don't get them, then buys on dips. This is what an inflection point is, a spot to go with the breakout from. We do appear to be a day away from setups in most of the markets, here are a few of them.
You can throw a blanket over all the currencies as buys except the Swiss and the DX as a sell, take your pick. This one is actually one of the weaker ones, but it has a good pattern in some of my indicators. If you are unsure, selling the DX is the other way to play this.
The next chart is a market I have orders in for today, Bean Oil. You can see once again that we are right in the support zone on the weekly chart, so daily buys if you get them by whatever you use should be taken. You can see I have an alarm where my orders are to alert me in case they are filled.
One thing to keep in mind here, the WORLD IS ONE TRADE. This has not changed one bit so if the sell in the indexes plays out you have to be short everything, if the market rallies you have to be long. It sucks but it is the world we are living in right now and it is not likely to change any time soon. The last chart is one exception to this, Hogs. The meats and softs and Natural Gas seem to be immune to this contagion of correlations. Hogs are in a sell zone in my book, and I am looking for something there right now.
That is it for today, light on commentary, long on potential trades.