Blog Stop Hit on SPXU

The Blog stop point was hit today by a few pennies. However, some of you may have placed the stop lower or moved the stop to 36.00 as suggested if your entry price was lower. So the trade will be a stop out at 36.40 for record keeping purposes, but I will still update on the trade because I assume at least a couple people may still be holding.

I wish I had more to offer on the stock market right now, but I really don't.

Several sector ETF's made bearish candlesticks today (engulfing, doji, little shooting stars). But in looking through a bunch of charts, there were quite a number of stocks that made solid gains. With the FOMC meeting, I am less inclined to put much weight on candlesticks.

The daily technical indicators on the S&P continue to diverge and implicate weakness. But when the divergences go on and on, it can lull you to sleep. The continuing divergence shows continuing loss of upward price momentum. At some point, that is likely to lead to a sharp decline, probably sharper than normal. The weekly MACD is flattened and almost ready to cross down with any down week.

Click on Chart to Enlarge

On a qualitative level, I still think it most likely that the above 7-legged upward correction off the July lows is lazily completing. However, just from a basic price logic standpoint, the alternate scenario is that this consolidation is a middle phase which should lead to another advance on par with other recent upward legs. Watching the price and bollinger bands should identify the direction of any coming breakout/breakdown.

Bottom line: as long as there is no close above the rally highs thus far, I view this as a topping process. I will be willing to enter (short/inverse) on modest weakness in the event of a break to the downside.