S&P500 was down 3.07 points after went down to 1067 low and retest 1085 high, actual high is 1083. The momentum is still on the bear side after it fail to surpass the former support now resistance, the 50% fib level 1085. In the last blog I mention that if we lost 1085, the next support 1075-1070 is fragile. Well we have a break and a low of 1067 on Friday. We all know 1075 is the 61.8% fib retractment level, so if 1075 was broken, 1055, then 1040 is the next stop.
Market is short term oversold, the risk reward ratio is on the bull side providing that we don't have a market crash here, for you know that oversold market will tend to be more oversold during a market crash.
TYH, TQQQ, are the best candidates to buy when the market rebound. Also financial sector stock FAS is the best choice after the banking reform on Friday, momentum will move this stocks up.
I still holding FAS, TLB, HVT, and I sold UPRO when it hit 133 on Friday, a tiny 2% gain with the cost price of 130.4. I sold KIRK in the morning with 2% loss because I want to substitute it with the momentum stock FAS.
The market need to bounce at this level or we may face another round of sell off. We have a weekly bearish engulfing candlestick signal, and it means we may have more selling going on.
Most of my stocks are in the money, I will set stop loss about 3% below my cost price, Although this market is oversold at this level, I don't want to take a risk if I don't see a bounce tomorrow, something is wrong in this market.
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