It looks like the rumor sparked rally that started on Monday has some legs. We broke through a resistance level today around 1180, but headed right into the buzz saw between 1204 and 1230, and got pushed back pretty hard. Still, we did get a buy signal on the Elder impulse chart. Buy signals have been unreliable during this bear market, but they have resulted in tradeable rallies, so we may get another one here, but as I said, that resistance we are running into is going to be very tough, and I don't think I will be contemplating any buys until we get through it. If it looks like we are faltering, I will be looking for some inverse ETFs that look good.
The Nasdaq is also heading into resistance, although it may not be as tough here. This is now clearly leading (if you have been following the sectors, XLK has been running circles around everything else), and price relative is now making a runaway move. This actually flashed a buy signal yesterday, which, had I seen it, I might have bought today.
The Russell 2000 is also on a buy signal, but also has that buzz saw type resistance overhead that the SPX does. Price relative is more or less flat lining, so I don't have a lot of optimism for this leg of the rally.
| Ticker | Relative Strength Index (14) |
| XLU | 54.98 |
| XLK | 52.77 |
| XLP | 51.94 |
| XLY | 51.47 |
| XLV | 50.38 |
| XLI | 48.57 |
| XLB | 46.82 |
| XLE | 45.83 |
| XLF | 45.49 |
Here are the sector ETFs ranked by RSI. There aren't many changes from last week: XLK has moved up, XLE down, and XLI has by default moved into the middle.
XLU is making things pretty simple: support at 32, resistance is 34, sit on your hands until it breaks one or the other.
XLF, despite some wicked short covering, has not made much progress since last week, either, I expect, at best, a test of the descending 50dma, but would not be at all surprised if it doesn;t even manage that. The only thing it has going for it is a rising MACD, but then again, that may just be oversold conditions working themselve off. These are radioactive as far as I am concerned.
I will have the new highs update shortly.
2 comments:
I have been holding TVIX since I last commented on Monday. ( I got your advice to not trade the distribution day count a little late ) . Anyways, if you are looking for inverse ETFs, I still think TVIX is a good way to short the market. It is more volatile than other inverse ETFs like SQQQ so caution is required. I really enjoy following your blog, thank you and good trading!
Hi YYBC
Thanks for the suggestion on TVIX. It's a 2X leverage ETF, so I can go in with a smaller position. I also like QID and SDS, although they make smaller moves. I might get into one if it really looks like the market is going to crap out in the 1204-1230 zone, and be ready to get out of we get back to 1140. Not that much of a move, but the market has been doing just that for the last couple of months.
Post a Comment