Today I had to close out all shorts and admit this is the wrong trade at this time. I am cancelling the BOT Short Signal and now immediately switching to a BOT Long Signal at the current time which is 10:40AM Eastern time and a price of 1155 on the sp500. The market is too strong, the longer term time frames are winning out and assuming that today’s strength holds we have the potential for a bullish MACD histogram buy signal on the daily as long as we get a close above today’s high. I am going long the TNA today at a price point of 48.54.
We are only a few days into October and we have BARELY created a bottoming tail on the monthly price candle. This is telling me that the market is extremely resistant to selling off from these levels and tells me also that we may blast topside and bust the 2007 ultimate long term bearish down trend line. I am getting a little bit ahead of myself, but this is how it seems to look right now.
It seems as though the last 2 weeks of price action was a ‘running correction’ which is very bullish because it shows the market is too strong to get a real correction going, it just keeps running while only a few stocks take some hits.
The final volume numbers today are going to be interesting and important because if they may start to indicate an entire character change of the market in terms of upside/downside volume.
Today is the kind of day that is painful, but at the same time very important in terms of the signal that is being given. I must respect the signal and the market.
If this is indeed a topside breakout north from the 2007 bear line, it has the potential to be quite massive, because by definition a breakout north from such a long resistance channel line must show strong and robust price spread and also preferably volume as well. More confirmation will be known in the days ahead, but I have to urge extreme caution on the short side at this time.