Prices are down sharply to start this shortened holiday week, and I'm fascinated by all the (anecdotal) talk I'm hearing from professional traders about non-confirmation in the VIX, lower volume, etc. Prices can move just as much, if not more, on thin trading volume. Additionally, it can become a self-fulfilling prophecy that when volume actually does come back into the market in a big way, psychology ensures that the selling continues as traders and investors react to broken support levels, etc.
Even leaving Elliott Wave analysis aside for the moment, when I look at a 4H chart of the SPY ETF, all I need to do is look at my momentum indicator which continues to make lower lows.
I also interpret ichimoku trending indicator which has all convergent signals pointing lower. There is not one bullish divergence anywhere in the indicator. Essentially, the interpretation is to stay short which is exactly what I intend to do.
- The signal line is well below the base line and expanding.
- Price is below the cloud and both moving averages, and continues to increase the gap.
- The lagging line is below price
- The forward looking cloud is red and falling
2:30pm update
The market is starting to rebound, but I don't see a bottom in sight yet. We could trade up as high as 121 on the SPY or about 1208 on the /ES, but that should be about the limit.
No comments:
Post a Comment