THE BEST SET UPS-IBD 200, IBD 50, STOCKTWITS 50

After a 3 day rally, it seems everybody and their mother is looking  for a pull back.  Last week sentiment got really negative, the cboe total put to call ratio closed above 100% 6 out of 7 days. Closes above 1 normally bring bounces, especially in a market that was down roughly 7% in a weeks time. The McOscillator (telechart) printed -264 on the 15th, -335 on the 16th, -208 on 17th, readings under -200 is where bounces come from.  This is the reason why on my twitter stream I was saying that if you wanted to short, you had to wait at least 3 to 5 days, no matter how compelling it looked.  The market is full of mean reversion buyers.  The Russell 2000 has been the stand out, the $SPY which closed at 129.74 has significant resistance at the 130 level, also it has its 20 day and 50 day right above 130.73, 130.51, the $qqqq looks vulnerable, but I have a hard time shorting it due to the fact that $aapl has like a 16% weighting in the etf.  This is when it gets tricky, shorting at resistance has not worked in the last year or so.  Bounces like the one that we are seeing now have turned into V-shaped bounces and have crushed the bears.  Sentiment is still quite negative.  In situation like this, I will let my watchlist either put me into long positions or keep me out.  If they trigger I will take them.  One group that has a few decent looking set ups is the oil refining market: $VLO, $TSO, $FTO.

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