Well, all I can say is that good thing we went “cash” (see yesterday’s post)! I started going cash as early as last Friday, and, closed many of my open positions on Monday and Tuesday, and only opened one new position yesterday (see Happy Trades!!. **Not all trades are listed.). I didn’t make a trade today. It was hard to call a bottom and I didn’t want to chase on the short-side in a bull market. These quick, sharp, sell-offs are among the characteristics of a bull market because things can’t just keep going up; they need to vent after running up for several days. But, I must admit that the “venting” this time was a little more than I had expected.
The DOW was down 84.52 points, or -0.62%; SP500 -0.97%; Nasdaq -1.52%, with BTK -1.32% and SOX -1.6%!! OIH took a hit today with -2.45%! And, GLD slid 0.79 points, or -1.21%.
The ones that worry me the most are Nasdaq and SOX!
Nasdaq closed below its 30-day MA today. We’ll need to see Nasdaq bounce right off tomorrow. I would feel more comfortable about the longevity of this rally if Nasdaq can close above 2560 tomorrow, which would be above its 10- and 20-day MAs.
GLD slid below 65 today. Although buyers have been trying to support it above 65, I thought we needed to see it closing below this level, before it goes up again. So, let’s see if GLD can bounce tomorrow. The rest of the metals were hit pretty hard today also. So, I’d also look for a bounce in names like ATI, X, and FCX, if this bull run were to continue.
Tomorrow, and the next few trading days (next Monday is a holiday), we need to be very alert. The DOW, SPX, and Nasdaq all have their daily MACD in the negative. Although their weekly charts are still very bullish, it is, nevertheless, very crucial for them to stay above their daily MAs and keep the daily MAs in the bullish formation (ie. 10- above 20- above the 30-day MA). Let’s hope we get a bounce tomorrow!
Good night and HappyTrading!! ™