The Market is Not Ready to Quit Yet

The tape action in the market today tells me that it is in no mood to fall apart quite yet.  The cycle date of the 18th of October could very well be an inversion where we actually see the market go higher right into that date.

The fact remains that the weekly MACD is no where near a downside crossover yet and this market can be extended higher for another couple of weeks, maybe even a bit longer.

It just does not seem safe to be aggressive on the short side yet.  I would rather wait until I have much more visibility on a bearish weekly MACD cross before I start getting too comfortable on the short side.

I don’t believe the crash scenario anymore either.  It is too late for one of those now to occur by the 18th.

One of the biggest mistakes anyone can make in a market is to fight the tape.  And whether I want to believe it or not, the tape does not look like it wants to fall apart yet.  The action still looks constructive and uptrending.

Maybe I got a bit too excited on downside possibilities.  Perhaps I started thinking too much how high and how fast the market went up.  But just because a market or stock is ‘high’ does not mean it cannot go higher.

Jesse Livermoore said once that a stock is never too high to buy and never too low to sell.  Good wisdom in that statement.

So in summary I am looking for select long setups and will keep the bear case in my suitcase for now until I see a more well defined short signal and a bearish weekly MACD Cross.

Two stocks I am watching now are HBAN and MRK for possible bullish moves.

Posted in Index Trading, SP500
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