i’m mainly working on the back-end of the site tonight as i prefer to focus primarily on the active trades and existing set-ups at this time vs. adding too many additional new set-ups unless something really stands out. the risk/reward ratio for going aggressively long here is still unfavorable IMO, and break-outs on both the long-side and short-side are at an increased risk of failure due to the fact that the market seems to be consolidating/chopping around a bit as we still struggle with key resistance on most of the primary indices.
although there are always a myriad of possibilities, my thoughts, fwiw, are that the market is most likely to either put in at least a near-term top at or near current levels and begin a new intermediate or possibly even a longer-term downtrend -or- the market consolidates around current levels, chopping around for a few weeks/months within a range maybe as large of say, 1265 to 1345 on the $SPX, until making an upside breakout and powering up to challenge it’s all-time highs put in back in late 2007.
as Mr. Market often has a special knack of making us eat crow on our prognostications, i will continue to focus on posting objective trade ideas, both longs and shorts, until a more clear trend has emerged in which to focus on. my current thinking is that an aggressive trader might be scaling into the most favorable looking short set-ups at this point with appropriate, but somewhat liberal stops in place to adjust for what i think will be an increase in volatility going forward. a more conservative trader or longer-term investor might consider booking some profits from the last few months and/or tightening up stops on their remaining positions. if unsure what to do, moving to a large cash position is probably not a bad idea. if this market just keeps going higher from here, there will still be plenty of desirable names that are already too extended over the last few months and due for a decent pullback. there are always buying opportunities in any market and the charts will tell us what to buy and where/when to buy it.
here’s an updated weekly chart of the $SPX i made earlier today but had to run-out before i could post it. same story as in the recent video updates… $SPX running into key resistance while overbought on the daily time frame, which raises the odds of at least some type of consolidation or pullback. internals have also been declining recently which is another caution sign.
-good trading and have a nice evening.
