Signals & Trading Plan for Thursday 10/17/19

Updated Thursday 10/17/19 at 9:07 AM EST

Sorry for this late post.  We were driving all day yesterday.

Table of support & resistance levels
The S/R table has not changed since yesterday.  Please note that the focus of this S/R table is short term.  It should help you to plan your short-term trades. 

Projections based on market internals
$VIX $VXN short-term charts show that volatility is likely to climb by a small amount, enough to bring about a Drop.  However, this will most likely be a shallow Drop. 

$SPX $NDX SPY QQQ TQQQ will most likely drop down to test Support2.

The charts of NYSE and Nasdaq Advance/Decline lines, as well as the charts of the percentage of bullish stocks for NYSE and Nasdaq have both turned bullish again.  NYSE charts are much more bullish than Nasdaq charts, but both sets of charts show that stocks are likely to go up in a robust Bounce after this shallow Drop.  

CBOE equity put/call ratio charts also support the "shallow Drop followed by a robust Bounce" scenario.

So together, market internals have changed their message, and they are leaning more toward the potential scenario of "shallow Drop followed by robust Bounce".

Planning your trades
If stocks do a shallow Drop followed by a robust Bounce, then it is possible for the Up Trend to resume.  However, do not bet on that Up Trend resumption just yet.

$SPX $NDX SPY QQQ TQQQ all have to survive the shallow Drop first, most likely down to Support2.  They have to find enough buyers at that level, or just below it.  

$RUT IWM TNA have to also follow a similar pattern of shallow Drop first.

$VIX $VXN also need to do a quick minor Bounce on their charts.  Then they can start another big Drop on their charts, to correspond to the robust Bounce in stocks.

So if you are holding short positions, consider taking your profits and unwind soon.  

Then get ready to re-enter long via $SPX $NDX SPY QQQ TQQQ.  You can also trade $RUT IWM TNA as well, though we won’t be able to publish S/R levels for them.

Disclaimer

The information presented here is our own personal opinion.  It is intended to supplement your own research and trading systems.  Consider it as food for thought. We are not registered financial advisers or licensed brokers.  We make no guarantee that anything will unfold according to our projections. While we offer scenarios for you to consider in your trade planning, know that you are proceeding at your own risk if you follow our suggestions.  
Note that we trade highly risky 3x leveraged ETFs.  You may end of losing a lot of money with them. They suit our portfolio, but they may not be appropriate for you.    Please read more about them before trading them.