well, today we had very little movement which is normally fine, but the volume is quite light which tells me there’s a lot of people still on the side lines waiting for the market to tell them what to do. In my end of day analysis I had a few indicators come up with bearish signals. This coupled with the fact that most of the indexes are very close to their 50 day and 200 day moving averages which always provide a slight hurdle to hop over (in either direction), I’m assuming we will have a down day tomorrow.
As you saw earlier, I cleared out of most of my long positions over the last few days, and am going to very lightly short the market in the morning. If we open with a strong gap up, I will be stopped out immediately and will happily admit that I was incorrect.
With this said, at this point I am still intermediate term bullish, just think we have some downside to experience before we will be ready to move up. I think if the buyers were coming in and interested in moving this market, they would have already done so (today).
I generally don’t trade counter to the market as I think it is asking for losses, but in this case, my risk/reward probabilities are quite enticing … so I take a small nibble at the short side of the market.