10.30
Last week 95% of the commentary on TV was negative. There was a lot of talk about the bullish trend line being broken and that the market has confirmed its down-trend. Every time the market starts to correct to the downside the bears come out and say we are going lower. If you have followed this blog over the last two years we have said that every correction was a buying opportunity and the markets went to new highs each time. We know this will not last forever and we are not long-term bullish or bearish we do not care since we trade wave to wave.
If you look at the chart above you will see the SPY daily chart is sitting at normal corrective support. All last week we noted to our members that SPY 140.35 was support and as of right now that level has held. There is also a trend line support that comes in at the same level. The wave down is the 1st corrective wave down from the highs so that means the move down is counter trend to the large wave that is still up.
With up trends it is the last bullish signal that fails to take out the highs is what turns the trend lower. This means to say the trend is down right now is too early. From the current support if the market goes back to resistance but fails to take out the high and we get a sell signal that is where we will be aggressive to the short side. The market as of right now is pulling back into support so going into this week there is odds that the market short squeezing to the upside.
With the hurricane and the market being closed it will add to the emotion of the market for the rest of the week. We hope that you were not effected from the hurricane.
With last weeks negative news flow and the hurricane the obvious thing for the market to do would be to go down. Most of the time the obvious thing to do is wrong.
Have a great trading week!
