Bulls stomped on the brakes today as a wave of disappointing data washed over Wall Street. The S&P 500 Index (SPX – 1,106.13) clung to its perch above 1,100, sacrificing just 7.7 points, or 0.7%, by the close. The index's 200-day moving average continues to be a point of concern. Nonetheless, the current upward momentum will crush the S&P500 index 200 days moving average in a short period of time just like the DOW and NASDAQ.
Our strategy and trading plan are still the same as yesterday. Just patient and wait for the short term frantic buying extreme at 1131 and 1145-1150, then we will jump in and short this market. Remember this is the third wave rally, the opportunity we are waiting is the fourth wave retractment, we must cover our short at the correct retractment level or we will be trapped by the fifth wave rally.
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