The recent sloppy price action in the broad markets has led to numerous whipsaw signals lately & although I still have some short exposure via QQQ & IWM, as stated last Thursday, I have not added & will not add to those positions until I see a compelling reason to do so. As far as when I'll pull the plug on those index shorts, I'm willing to allow about another 2-3% upside in the broad markets. QQQ & especially IWM are still comfortably below their recent highs and although I don't have any exposure to SPY, I'm watching for (and almost expecting) the next whipsaw signal to be for the bulls with a breakout above the 212.40ish level. Even a break above this resistance level that has been capping all advances in the SPY since Feb would still have the SPY within a bearish rising wedge pattern with double negative divergences in place. Bottom-line: Although a breakout in the SPY would appear bullish on face value, the odds that it will fail are quite elevated IMO.
After finding support at my initial target zone, IWM has once again challenged the previously highlighted 123.50 resistance level on several attempts, failing each time so far. My expectation remains for a move down towards at least the 114.35 area in the coming weeks/months.
GDX has been in a clear uptrend since March. However, one can see, the objective entries/add-ons come when prices are at the bottom of the ascending channel while both tags of the top of the channel and/or overbought readings typically mark near-term tops & provide objective profit taking opportunities. Also keep in mind that if my reversal in the $USD (UUP rally) call pans out, that will likely create additional headwinds for gold & the mining stocks, which not only just tagged the top of this ascending price channel but also registered an overbought reading when they did so (i.e.- downside in the miners is likely in the coming days).