Read Larry Connors' blog – Short Term Trading Strategies
June 18, 2009 (FinancialWire) -- Dr. Joe Duarte (http://www.joe-duarte.com) recently noted: The Short S&P 500 ETF (NYSE: SH | Quote | Chart | News | PowerRating) has crossed above its 20-day moving average.
Duarte added: Those who follow our S&P timing model should have shorted the market via the Short S&P 500 ETF on 6-16, as the fund triggered its entry point, having crossed above its 20-day moving average.
The move came as the S&P 500 closed below its 20-day line. The real question is whether we now have a real trend reversal or whether the up trend will reassert itself. Anyone who's been following this saga knows that the S&P 500 has touched its 20-day line six times since bottoming in March. The first five times, it used the support of the 20-day average to consolidate and move to new highs.
This time may be different, and the odds are on the side of the bears, at least in the short term. Obviously, the next few days will be very important as the market will likely make a decision about its direction for the next few weeks.
Short selling is not for everyone. It has the potential to deliver significant losses quickly, as markets reverse. Thus, this trade is only for those who can withstand volatility and are experienced traders.
Those who are more conservative investors should have been raising cash over the last few weeks as prospects on the long side of the market have been fading.
Duarte's conclusion: Patience remains important at this stage of the market cycle.
Make sense of today's nonsense. Get Doctor Joe Duarte's Market I.Q., at:
http://www.joe-duarte.com/free/order_choices.asp and subscribe to www.joe-duarte.com, for its daily energy review and stock picks.
A book for this market - The All NEW Market Timing For Dummies. at: http://www.tinyurl.com/market-timing .
Duarte partners with the Investors Resource Center at Investrend Information (http://www.investrendinformation.com).
Duarte's IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.
He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela's political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.
One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
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