Today was a very quiet day in trading. The NASDAQ was down 1.56, the DOW was down 4.41, the S&P was down 2.34, and the Russell was down 5.02.
On Friday I stated that the market was extremely oversold on the daily charts and I was looking for a move back up. At that oversold condition I stated I would look to buy QQQ (NASDAQ 100 ETF), SSO (ProShares Ultra S&P500), and MSFT (Microsoft). On Monday after being down in the morning the market started rallying. The S&P futures have traded up 91 handles and the DOW has traded up over 500 points. Yesterday I stated I would be looking to take money off the table and be flat as QQQ and SSO rallied more than $4, SPY rallied more than $6, and MSFT rallied more than $1.40.
Now I am seeing a pattern on the daily charts that I am not comfortable with. There is a chance that the market could go right back down. If SPY (SPDR S&P 500 ETF) takes out the 209.01 level on a closing basis on the daily chart I will get a huge buy signal. If I get this buy signal I will be looking for a pullback to set up a great opportunity where I would look to buy. If we get this pullback I then expect the market to push higher. I expect the market to make a series of higher lows into the end of the year.
Yesterday gold made a new low for the year, trading down to 1062. Gold was up about 12 dollars today. The 1040 level is a big number in gold. This is the level at which the IMF sold a large amount of gold to India in 2009, pushing gold up to the 1200 level. Gold is extremely oversold here. I am on the sidelines waiting to see if a pattern sets up on the daily chart.
Oil was down 45-50 cents today, trading down to a low of 39.89 before shooting back up. I have a sell signal on the daily and weekly charts for oil. I am looking for a bounce in oil where I would look to go short.
On the Sidelines, Waiting for Clearer Pattern
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