Wednesday, January 27, 2016

Jan 27 - Short signal SPY/ QQQ

Looking for a retest of lows.  Today was a very good setup for the bulls and the breakout failed.  If and when we hit the lows, it might trigger a strong reaction up.

Sell signal on 2 hr frame which I usually deem something not to bet against.

Lots of space below in QQQ

Looking more like dead cat bounce and/or consolidation for another leg down.  Still a chance for a sustained upturn but it needs to happen by tomorrow.  If we move down, will be seeing if there is a reaction at previous lows.  If not, we could be in a big slide.  What looks weak is that we haven't had a single day of sustained intraday buying start to finish.  At some point that almost always occurs near a bottom.


Doug said...
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Doug said...

It's paid to stay short in 2016 so far. In 2001, after the bearish MA crossover, the S&P went down an addt'l 43% in 698 calendar days. In 2001, the S&P went down an addt'l 54% in 432 calender days. Extrapolating that "trend", after the bearish MA cross in 2nd week of Jan 2016, one might expect something like 60% decline in 267 calendar days.

Greenlander said...

Yeh the short term action has looked pretty ugly. I'm not targeting the declines you mentioned but I am keeping them in mind. I haven't written off the bull market completely but we are getting more and more signals of weakness for sure.