Monday, June 29, 2015

Market Waking Up Now

Last post I noted how the market was lulling the crowd to sleep.  Now we obviously see it waking up.  But what direction will it go longer term?

On 6/23/15 the dual time frame VIX bollinger band set up which I have showed many times gave a sell set up.  But now a few days later the set up is reversed back to a buy set-up.  So short term I would guess stocks have a couple more days of lower lows, and then prices attempt to rebound.

Beyond that, I don't have a firm opinion at this point.  With the non-confirmation of the SP500, Dow 30, and NYSE not making new highs while the Nasdaq and Russell 2000 did, it seems sensible that stocks will experience an outright correction off the recent highs.

Today's gap down broke many trendlines with a significant gap.  That makes it hard to get in the new trend at a "good" price.  But I would say that that also increased the probability that the new trend is going to be substantial.  So if I had to pick here, I would pick that the trend will be down out of this consolidation.

However, I will alert you of buy set-ups from my trading algorithm as they unfold here on the way down.  If you are short, you could use them as scale out signals.  If you are awaiting a long opportunity, you could use it to get better timing on a potential bottom inflection point.


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