We’re back from Normandy. We had a great time despite the relentless rain. For me the highlight of the trip was seeing the cliffs at Etretat. I’ve seen the famous seascapes in Monet’s paintings and it was a thrill to see them up close in person. Here is a family shot atop the cliffs.
As for trading.. I took a few minutes to study the daily chart and I see a number of possibilities:
- Pullback to 1207 area and then continue down
- Pullback to 1207 area and then retest the highs
- Continue down to one of the support levels I’ve marked on my chart below
Friday registered as a pro bar. There has been a lot of responsive buying however buyers haven’t been able to overcome the sellers.
I still have a runner open and I have a target for that set at the next support level which is 1180. If I had a better entry closer to the top then I’d be much more patient. However, my entry I consider “poor” because it’s 17 pts off the high and I do not want to sit through any retest of the high. It’d be better to exit the short and look for a better entry. And that’s why I’ll look for 80 to get out. If I see strong buying I’ll be looking to get out as well.
I still think a correction of 60+ pts is possible. Curtis Faith, one of the legendary turtles, has sounded his alarm. He’s not saying the market will crash, he’s just saying the risk of a big move down is too great to justify being long. The S&P 500 has gone up for 10 weeks straight. If those longs start to panic there could be a stampede for the exits. So far not only are they not stampeding, they’re not even walking towards the exits. So the suspense continues.
I hope you had a good weekend and good luck with your trading this coming week.