- after breaking down and giving a sell signal 9 trading days ago, SPY made a feeble attempt to rally, climbing above 110; notice the volume on updays - much lower than the very heavy volume on down days, a simple indication that there was much more selling than buying;
- the rally high failed to reach not only the prior high but even the breakdown point or the middle of the 4 week trading range;
- a long-term trendline from July has been broken decisively;
- the 50 day moving average (not as important in my book) has been violated and the 150 day seems very close to being violated.
What to do?
Try one of the short funds, such as DOG which returns the inverse of the DOW.
Oil and Gold are also breaking down, so I would not go long these. Gold has a very interesting bearish chart. The dollar's rally versus the Euro (which is another good short here) for fundamental reasons is making anything priced in dollars (read commodities) less expensive for no other reason.
Someone out there fears a tremendous economic contraction with decreased need for Stuff such as Gold and Oil, both of which are shortable thnaks to ETFs (GLD and OIL).
Happy hunting - if you are conservative, you should be flat and in cash or short term bonds (check out SHY as a proxy for cash).
If you are aggressive, you should be short some of the names I mention
Publish Post
Happy hunting! Keep your powder dry.
