Today was about as boring a day as I can remember in the stock market. In fact it seems like it is Christmas 2010 already or the day before the new year. You give me a dollar and I will give you a dollar back, and then we do that about a thousand more times. That pretty much sums it up for today.
I attempted to go long LVS Las Vegas Sands Corp today but then got scared and jumped out within about 15 minutes. I made that decision because of the volume non confirmation I mentioned in my previous post. Today could have been the final low in Las Vegas Sands Corp before moving higher, but for now anyway I am going to stand aside. I am just too nervous about the general market as a whole. And honestly the ideal entry for LVS should have been way down near 16 and change. That is where the MACD buy signal was generated and now the MACD is toppy and overbought.
So why didn’t I grab some LVS near 16 and change? Good question. Probably because it was not jumping out at me at the time. But that is always the tendency of the best buy setups, they are always quiet and not obvious at first.
I think I am scared money right now. I can’t help it. I would rather not be too committed towards either side of the fence. I would rather be right on the fence right now.
I am still long the TZA Direxion Daily Small Cp Bear 3X Shs because it really has not done anything to change my mind that it is forming a bottom. There appears to be slowing momentum to the downside and there was a doji indecision candlestick today as well as light volume for a second day in a row.
The Direxion Daily Small Cp Bear 3X Shs may in fact be the Best Online Trade as we go into next week. From a risk reward perspective it seems to be the most compelling trade out there right now.
A brief look at the SPDR S&P 500 ETF 8 month candlestick chart reveals some possible meaningful clues as to what may transpire next week after the long holiday weekend.
If you look at the chart carefully you can see that the market has had the tendency to get sharp rallies going (almost vertical rallies) but then transition into small rising wedges near the peak of these rallies. After the rising wedges have completed, price has fallen quite sharply downward through the wedge into brief corrections.
The current rising wedge appears to be consistent in form just like all the other ones have been and the very light volume of the past two days is also consistent with this one and most of previous rising wedges as well.
The vertical red dotted lines also show how near the end of the wedge formations coincide with bearish daily MACD crosses to the downside (again, also consistent with the current rising wedge).
So perhaps, since this is indeed a shortened holiday week, the market will hold itself up in this rising wedge for two more days ? And then Monday April 5, 2010 will be the ideal spot to go fully long the TZA or other inverse ETF ?
That is my thinking right now. But I am still leaving some probability that the market busts out northward from this rising wedge. It seems unlikely, given everything I just said about the SPDR S&P 500 ETF , but I have seen northward breakouts out of rising wedges enough times to still leave it as a possibility.
Last but not least, you should also be aware that this weekend there are two Larry Pesavento Index Days. I can’t explain what these exactly are in detail since my knowledge of astro trading is very limited, but I can tell you that they are important and can mark strong turning points in the market. There is one today and then one this Friday. The previous one that occurred was on October 19th, 2009 time period and the result of that one was 70 S&P Points to the downside.