Two weeks ago I mentioned that I couldn’t understand why several commentators were talking up the markets by way of a V-shaped recovery.
I said we would need confirmation, and we did not get it.
Now we’re in a bearish looking situation.
Last week I mentioned about the prevalence of whipsaws, and how that would typically result in further bearishness. It has.
As I said, it begins to resemble a waterfall! But here it’s an ugly waterfall. Not the friendly type that consolidates neatly below its 200-dma.
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Current Market Behavior:
The S&P again flirted with its 200-dma before closing Thursday and Friday below it, which is bearish behavior.
My S&P Swing Timer is now slightly negative but not oversold, so as I said last week, there is plenty of scope for more downside.
Again, do not use the Market Timers as blind signals. There is a certain discretion to be deployed with these, as I mention in today’s video, and I’ll record a tutorial on this soon.
Market Outlook:
I’ve mentioned a few times that commentators might have been calling for a V-shaped recovery because it somehow served their interests to say that. I always want confirmation, and we certainly did not get any confirmation of a recovery.
In fact, we got the opposite of confirmation, and my last weekend’s comment that recent lows look likely to be tested looks spot on.
I also mentioned that Energy stocks were bullish but getting to overbought levels. Again that was spot on.
Stock Selection:
I’ll say this nearly every week, but again, focus your energy on consolidations near Key Levels, with other Big Money Footprints in evidence. You’ll get bigger odds on your side, and you’ll be able to manage your trades effectively to control your risk.
This applies also to options traders who like some adventure.
Application:
Interestingly, consolidations this week are overwhelmingly ugly, but I have found a few nice setups which I’m sharing with you today.
Software Upgrades
The charts have been upgraded, and your Journal entries will now append to your journal without requiring a refresh.
Further tweaks and fixes will happen this week as well as the much awaited “Options Strategy Recognizer” which I can’t wait to show you!
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.