Good morning. Yesterday's action brought some carry over/follow through from Friday, finishing the day with about a 1% gain. We have three types of patterns going on right now in the markets'. QQQ is telling us to sell, DIA is telling us to buy and SPY going nowhere.
We bounced off the 20 day, stopping at the 50 day on SPX. So the question is: Is this ABC correction going to hold? It's going to need motivation if it's going to follow through on the roll over. And the CPI report on Thursday could be what tips this over. Most are saying that the report is going to be higher than expected. So if the FED is still hawkish. The CPI report favored coming in higher. Why would the markets continue higher? Only time will tell.
Plan for the Day: We can still run up and visit 3850ish and be in line with our ABC correction. That's the area I really wanted to see the price action to confirm the end of this ABC correction. If there are many rejections at the 3850 area, I might want to get into a low risk short (1% of my portfolio) and put it out 4 weeks. If we trade sideways, I'll wait again tomorrow to get a better entry on a short position. If this blows through 3850 today or tomorrow and makes it's way to 3900, I'm going to sit on my hands until I see the 20 day cross over the 50. Then, I'll turn bullish. Again, be patient, stay disciplined and trade the markets in front of you. Happy Trading!
We bounced off the 20 day, stopping at the 50 day on SPX. So the question is: Is this ABC correction going to hold? It's going to need motivation if it's going to follow through on the roll over. And the CPI report on Thursday could be what tips this over. Most are saying that the report is going to be higher than expected. So if the FED is still hawkish. The CPI report favored coming in higher. Why would the markets continue higher? Only time will tell.
Plan for the Day: We can still run up and visit 3850ish and be in line with our ABC correction. That's the area I really wanted to see the price action to confirm the end of this ABC correction. If there are many rejections at the 3850 area, I might want to get into a low risk short (1% of my portfolio) and put it out 4 weeks. If we trade sideways, I'll wait again tomorrow to get a better entry on a short position. If this blows through 3850 today or tomorrow and makes it's way to 3900, I'm going to sit on my hands until I see the 20 day cross over the 50. Then, I'll turn bullish. Again, be patient, stay disciplined and trade the markets in front of you. Happy Trading!
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Still trying to decide where it wants to go here at the 3850 area. Lets see what happens the rest of the day.
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Bulls aren't convincing me.