Hello Everyone,
Quick comments: Yesterday the market ended on it's lows but I pointed out a rising wedge on the VXX 15 minute chart that argued for a pullback in the VXX which supported a sharp bounce in the SPX. Today, the SPX rallied sharply back to the 4600 area in the morning before stalling out. Then we saw an intraday break in symmetry leading to a lower high and from there on sellers took control breaking back below the 4565-70 support area on ES/SPX. Selling intensified when price broke below last support of 4540 on ES and tumbled down to the next significant support near 4460.
The QQQs have already broke below their 200 day MA while the SPX is fast approaching its 200 day MA near 4427 which is likely to be tested soon. Stronger support is found just below at the prior wave 2 zone which is 4315-4365 on ES with some support on ES just above at 4410-30 area. Clearly, today we saw some forced selling (liquidations) which led to some panic. Last week, I said to Buckle Up and I would expect more volatility in the near future so remain nimble. and adhere to YOUR PLAN and triggers. Lastly, when you start to see sentiment get overly bearish (see Fintwit) you should start looking for valid long setup and while managing existing hedges/shorts.
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.
Steve
Please take a moment to look at the trade ideas.
