Eight days ago I shared that three key elements were in play….Support off of the 2009 lows is still in place, long downside wicks have been created along this line and the number of bullish investors has declined quite a bit. (see post here) Since these conditions came into place, the markets have rallied a few percent. See conditions below…
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Below is a 4-pack update, highlighting long and short-term support and resistance lines…
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Bottom line….Long-term support is still in place. Right now short-term falling resistance is at hand at (2) as of last nights close!
Game Plan…If very aggressive, pick up PSQ with a tight stop in case a breakout takes place. If the breakout does take place, which it sure can, will follow it by closing the inverse and pick up long ETF’s.
Larry….Good question! Per being long, I prefer to be long the Russell over the NDX at this time. Russell didn’t break a key support line of late that the NDX did. If a person is to attempt to score on defense, I like the weaker index of late, which seems to be the the NDX. Since the Russell seemed to have strength of late, I didn’t have much interest in shorting it at this time.
Chris,
Do you think the Russell will try to test the highs at this
time? My oscillators are maxed high at this time and own RWM
but have not hit my 3% stop yet.
Thanks for sharing your expertise.
Larry
Chris….500 and Russell have broken above the lines. At this time the NDX is at the line, because it was the furthest below resistance. Small caps continue to reflect relative strength compared to the NDX.
Would today’s action qualify as a break of short term falling resistance or is it too early to tell?