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Stocks are primed for selling rather than buying
Yesterday Monday we explained that $VIX $VXN were likely to rise up in the short term, which supports the theory that Dip6 is likely to arrive after FOMC announcement tomorrow Wednesday.
Indeed, today $VIX gapped up and rose to a high of 14.18, and $VXN gapped up and rose to a high of 17.69 today. This happened a bit sooner than we anticipated though. And now the rest of market internal indicators are putting out an increasingly louder and more bearish message. We all really should pay more attention to this.
Dip6 has been overdue for over a week now. And under the hood, market internals are saying that stocks are more primed for selling than buying. All that’s needed it a negative catalyst.
This catalyst is likely to be FOMC announcement tomorrow. The Fed is expected to cut rate by ¼ point tomorrow, which they most likely will do. But the Fed is unlikely to commit to cutting rates aggressively for the rest of 2019, into 2020. This is what the market really wants, and it is likely to be disappointed and upset about this.
So the probability of Dip6 arriving after FOMC is higher now.
The rest of this article covers:
Updates from market internals
Support and resistance zones for $SPX $NDX $RUT
How to approach your trades
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