Today on two occasions I started to write a post about how it seemed a BOT Short signal was appropriate. But then in each case I deleted the post and decided not to submit it. I was writing the second post right near the close of market but then was not able to send it out before the close.
Since the BOT Long signal of 1201 the market has had a nice advance. Current prices look like an ideal time to switch to neutral or short. And yet I have not pulled the plug and switched to a BOT Short Signal. But why?
I am trying to avoid excessive signals and whipsaws. The best time for me to put in a BOT short signal is a definitive close under 1227 that could imply a move back to the bottom of that trading range near 1175. If the market cannot manage a close under 1227 then I just have to keep presuming the strong bullish uptrend. We may push down to 1227 and then get a hammer reversal going, so only a close under 1227 would tip the scales for the actual signal.
But honestly I do see enough signs right now that I could put in a BOT Short signal at the open tomorrow morning. I might just do that depending on how the environment looks in the AM.
If the inverse correlation between the US dollar index and the broad market is still working then the recent advance in the UUP today should be a sign the market is ready to rollover. The UUP looks like it has made a falling wedge or pennant and looks as if it might break topside soon to initiate a C leg up of an A B C leg up.