In this video, I discuss my thoughts on the progress up to 3838.5 which is a 50% retrace from the August highs. We are well on our way for a repeat heading into November and I’m thinking the rally could just be starting up, as there is a fresh new squeeze on the /ES daily chart.
It seems to me the market is going to drift upward, but the path is unclear. And while we could look to play the bullish side, I think the bigger move will be down once the SPY and its Daily 50 SMA meet.
The general idea of what I see the market doing right now is drifting upward to meet its Daily 50 SMA. I am not sure of the path, but I think they will converge on each other, and that will setup the next major direction which I believe will be new lows. Let’s watch and see if the bear flag plays out in such a way.
While the market churns in this wide ranging chop to no avail, I think I see what is going on and when it may end. I’ll do my best to explain what I am looking at in tonight’s mid week market update.
Check this video to see how we allocate our time in a choppy market, and avoid risk-prone pitfalls.
With every chart I review, the first thing I’m looking for is the status of the Squeeze. This signal is helpful with directional moves, and is starting to show up in some of the most important currencies and stock indexes.
Though the bulls have had a good showing over the last few days, I continue to think the path of least resistance is to the downside. Let’s take a look at the SPX short we’re pursuing in the Options room that provides plenty of time and cushion.
While the signals on the bigger timeframes remain bearish, we want to continue shorting into the rallies. Let’s cover the December SPX short we’re currently bidding for, which offers plenty of time and cushion to catch the next leg down in the market.
I explain what I am focused on and why, using volume in a way that has been very accurate in this choppy market.