New SDS Trade - Short Term

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60 min stochastics is coming down off a bearish divergence with price.

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NYSE TICK showing a bearish divergence today indicating potential waning in the bullishness of large scale program trading.

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The S&P 500 cash and the Nasdaq Composite (COMPQ) formed nice doji's today at the upper bollinger bands. I have not shown the bollinger bands here, but one thing of note is that while the S&P is at new rally highs the upper bollinger band is not. This is a type of divergence that shows up some times at turns. Of course if the move up continues, then that band will probably move to new highs soon.

Mean reversion models that I follow were very overbought last week, but there was no sign of loss in momentum until today. There are a plethora of intermediate term red flags going up as well, and the overall picture is similar (or more excessive optimism) than all the prior substantial pullbacks during this rally.


New Blog Trade:

Buy SDS tomorrow/Tuesday with a limit order of 34.50. I am not posting a stop on this initially.