They just don't set 'em up any better than this. I've been writing about the low volume drift into resistance for about a week now. Well it finally played itself out today with a huge drop on increasing volume. This was another of those days with horrible breadth (80% to the downside) and where every sector was down. In short (no pun) *they* sold everything today.
Speaking of shorts, this was a great day to be short. I was about 350% short mid-day and had my second best day of the year today. I'm always amused on days like today when friends of mine ask me how I'm doing. As if I could/should only make money on up days and lose money on down days. I have to remind them that traders can make money on down days and can get crushed on up days.
I happened to look at the Value Line Index today and I just had to post it. I don't know if anybody actually trades off of this index but it made a really nice setup with its retracement to the 50-day moving average. My charts don't provide volume on the Value Line Index but I assume it was light just like it was on the major indices.
Back on March 7th I wondered if the Nasdaq's gap was begging to be filled. It now looks like that gap will indeed get filled.
We've got a very similar situation on the S&P 500, although this chart doesn't show the gap on the 7th. I fully expect the March low to be retested.
The Russell is threatening to break through support again.
All the short-term trends are down again with these drops back under the 10-day moving averages.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Down | Down | Down |
| Short-term | Down(-) | Down(-) | Down(-) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
Hi Mike,
Congratulations on having a great day. I had a very good day as well. I get the same reaction from my friends, they think just because the stock market went down that I must have lost money. Seems like a lot of people think that way...or maybe we just have the same friends :-)
"or maybe we just have the same friends" =))
Congrats to you too Kevin
It is much more important to win your NCAA pool that to call the down market. Congratulations but I'll more impressed if you pick the winner of the tournament. Go AAPL go Oregon
Yeah, about that... stoopid PicksPal requires me to invite people individually into the league I set up. What a pain.
It's funny how you mention it doesn't get setup any better then this. A friend of mine and I have been positioning for this move, and we kept thinking how perfectly it was setting up and that maybe we were the suckers. It just seemed too textbook. Well, so far it's playing out fairly predictably. Now comes the interesting part. Congrats on the awesome day.
Joey
I'm glad you were positioned properly Joey. I agree, it did almost seem too textbook. But much of the run up since last summer was very textbook as well. It pays not to make things too complicated.
Hi Mike,
In regards to the TRIN/TICK, where there any flags this morning that it was going to be a bearish day. .
Thanks
Kevin,
I don't watch TRIN and I didn't notice anything unusual in TICK. In fact, TICK triggered my high alert a few times early in the session as the gap faders did their thing.
350% short - Awesome. Congrats on the great day!
I should have been a full 400% short but I felt like I was getting greedy ;-)
Grats on a great day Mike.
Lol, I had a good day too...in my mind :x
Seriously though, I was setup to short today (cautiously though) but decided not to trade because I was terrbly sick. With a runny nose and hurting head decision making is all goofy. And now it is one of my rules to not initiate trades when sick
Rahul