Thursday, October 9, 2014

Beware of Another New Low For This Correction

Interestingly as my last post had mentioned, if we saw a new low for the correction and another buy signal, followed by yet another new low and high VIX spike, I think it would bode poorly for stock prices moving forward.

At this point we did see an initial new low followed by a major reversal higher and a follow through type day yesterday.  Now here we are with immediate reversal in prices back towards the lows of the recent correction.  So, again I suggest here that continued "nudges" lower will likely be indications that force is gathering behind a crack in the dam.  And it could break and lead to flood of selling.  Specifically refer back to my last post on the Russell 2000 support level and double top projection.

I again suggest that a short on a break of yesterday's low with a stop above the intervening high could be a profitable play with significant downside expectation.

Pete

1 comment:

  1. West Texas Intermediate extended its slump into a bear market amid speculation that rising global oil supplies will be more than enough to meet slowing demand. London’s Brent traded at the lowest price since December 2010.
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