The S&P 500 Index surrendered 5.9 points, finishing its second straight session beneath its 200-day moving average , closed at 1083.61. Disappointment over the Initial jobless claims data drove the S&P 500 to an opening loss of more than 1% and below its 50-day moving average for the first time in about three weeks. Despite several attempts, the S&P 500 was never able to break back above its 50-day moving average near 1088.
Market gapped down this morning, all the indicators were extremely oversold. We had a gapped down sell off day yesterday, today's gapped down panic open gave me an opportunity to long this market. After five minutes, market rebounded from the low. I bought UPRO right away at 129 and set the stop loss at 127.5. At 11:30, I sold all of them at 132.5 with the five waves rally finished. It was very tough for market to break through the 50 days moving average at 1087 provided all the economic news are so negative today.
As I mentioned yesterday, market will lose stream if 1084 is broken, now we have 50 days moving average 1088 broken too. In addition to that, the trendline of this rally start from July is broken also. If I tell you to long this market, you must think that I am crazy. The true is, I still waiting the market to hit 1140-1150.
If the market start rebound from here, it still has a chance to start the last leg fifth wave rally. However, it is unwise to long the current market consider the longer bearish perspective. Therefore, I will wait for the 1040-1050 to add on my short positions instead of long this last leg rally at the current price level. Nevertheless, If you are a day trader, you may want to grab the upward profit potential provided you can watch the market real time.
If you did read my earlier posts, you should able to lighten your long investment in time. For people not so familiar with stock market, but holding their retirement as mutual fund. Here is my advise: "lighten your investment as soon as possible."
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