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Market Recap for Monday 9-12-16

This video is really longer than it needs to be as the gist of what covered is the fact that despite the stock market's impressive recovery to print a strong close after gapping down at the open today, I don't see anything in the charts that indicate that today's rally was anything more than the expected snap-back rally following a very brief & minor overshoot of the first support level on QQQ (as anticipated all the way back on Sept 1st in the first 60-minute chart below).

Should the market manage to continue to build on today's gains going forward, only a solid 60-minute close above the top of Friday's gap (117.23) would begin to call the bearish scenario into question. QQQ stopped at 116.49 today, 2 cents shy of the bottom of Friday's gap (resistance) and a penny below the top of the optimal short entry/add-on zone that I posted before the market opened today, offering what will likely prove to be the most objective & timely short entries in months, possibly years or a very small loss for those that stuck with their trading plan & took advantage of this bounce back to resistance & very objective shorting opportunity, if stopped out.

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Sep 12, 2016 8:18pm|Categories: Completed Trades - Short|Tags: |4 Comments

4 Comments

  1. dan123 September 12, 2016 11:03 pm at 11:03 pm

    Thank you Randy, great recap as always

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  2. dmel September 13, 2016 7:10 am at 7:10 am

    Randy,great to see that you stand by your charts even when the path seems to gets rocky&muddy. You always go the extra mile,many thanks

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  3. jacant September 13, 2016 8:35 am at 8:35 am

    Thx for the Recap!

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  4. rsotc September 13, 2016 9:34 am at 9:34 am

    You’re most welcome dmel, dan123 & jacant. dmel, The thing about the market is that some of the biggest gains in short order are (or can be) made immediately following periods of muted, sideways trading in the market, once prices finally break out & volatility starts to spike. Unfortunately, it’s not always an easy as there isn’t always a ‘green light’ long or short buy signal at that point, rather we often get some initial big swings back & forth just like we had on Friday (the biggest drop since the end of June) and yesterday (the biggest gain since early July). Same thing happened when the market topped at the end of 2015 just before the sharp drop into the Feb lows.

    Shorting the backtest of the Aug-early Sept trading range yesterday may or may not prove to be a profitable & timely entry but the most important things to me are: A) It certainly seemed objective, as shorting a bounce back to the bottom of such a well-defined & extended trading range, former support which is now resistance, is basic TA 101…. B) Even if Friday’s very convincing breakdown proves to be a whipsaw signal/bear trap, the short entry was still objective as we are able to use the chart to identify an objective stop level not based on a random move higher, rather a key resistance level (the top of Friday’s gap/Thursday’s close) in which to place the stop and… C) if stopped out, the risk (total loss) pales in comparison to the potential profit (return), should the markets fail on the backtest & move sharply lower as the chart indicate is the most likely scenario.

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