Today I got some entries. It's been a crazy month as the markets have gone higher with momentum slowing up. I've been staying patient waiting for the next trades. Before we go into the trades (next post) let's first take a look at the overall markets via the SPX.
As you can see until the last few days during this pullback, we were just going higher and higher - BUT, look at those stochastics. The stochs were dropping as we were going higher, that's officially called a "divergence" and points to a drop in prices. I don't know how low we're going to drop, but a good guess would be the level of support (solid purple line) immediately below it, or possibly the other level of support (dotted red line) below even further. I don't think we'll go much below that red dotted line because that would be 2 levels of support AND the 50 day moving average is just below that.
So, I think we have at least a couple of down days before the bulls come back in and drive this market higher. I do BELIEVE we are in an uptrend, but then again, I don't count on what I believe - I count on what the charts tell me and nothing else.
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