Tuesday, January 19, 2016

Jan 19 - Potential downside ahead

Today's action was very disappointing as once again the hourly signal failed again.  Sitting short SPY and possible this level in SPX fails leading to a bigger move down.

Scenario 2 could be playing out (with the orange boxes) where several days of churn failed to create a floor and panic ensued.  As recently as today I was seeking scenario 1 to happen.

SPY continuing to drift down in its channel.  Today's lack of follow through was very bearish.

Next level of support is around 177-178 in SPY.  Given that the past two breaks have led to the lower BB being penetrated at least 5-6 handles, it is likely the same will occur this time occur if tomorrow is a strong down day.
 Looking for VIX/ VXO to match previous highs


No comments: