Hello Everyone,
Quick Notes: Consolidation day (inside day) for the major indices following yesterday's selloff. Tomorrow we have the FOMC along with other issues such as debt ceiling, Evergrande in the backdrop. Technically speaking, we are watching to see if we can a bounce back near yesterday's gap/50 day MA (possible backtest) or further downside from here. For now, the prevailing trend remains to the downside.
8/26 Comments
Quick Notes: After the recent 4/5 day rally, all the major indices closed lower today. Tomorrow is the Jackson Hole announcement and there have been Fed speakers hinting at tapering so we'll see how things unfold in the coming days/weeks. Technically speaking, ES held initial support today 4465 after testing it twice today. Zooming out, if you look at the SPX this year, we have seen six rallies after pullbacks around the 50 day MA. Given that it's been tested so many times, my belief is the next pullback will not be a lucky 7 which, if true, would open the door a deeper pullback that is likely to be more complex. As always, respect the prevailing trend until evidence changes BUT make sure you have a plan in place ahead of time that includes an exit strategy commensurate with YOUR approach and risk tolerance.
Note: Several previous ideas on watchlist remain valid but simply have not yet triggered so continue to re-examine each night. Consider making a fresh top 10-12 setups each night and put on front page along with existing trades. My advice is to keep your total ideas to a manageable number. Lastly, it's best to wait at times for valid setups to form - sometimes less is more.
Please take a moment to look at the trade ideas.
