Read Larry Connors' blog – Short Term Trading Strategies
From last night's update: Support for the spx sits at 1016-1012 and then 1005. Resistance pivots are at 1033-1030 and then 1038.
Review of previous night's notes and today's tape: In the morning update, I adjusted the upside resistance levels to resistance 1 (1030) resistance 2 (1038) and resistance 3 (1043). The spx made it up to the 3rd resistance level and that was the high for the day. The bears need to step in TUESDAY and it better be early. The bears have made a habit of getting the ball rolling and not being able to finish the job.
Now the bears that were confidently stamping the dreaded P3 locked and loaded from last week are starting to put lines in the sand and 2nd guessing that hard stamp. Yes, Primary 3 or as I am counting it Primary C may have started, but the puppet masters seem to be using these counts to lore in more shorts before they wreck the count and have them re-labeling and re-labeling.
Now the only problem with this game the PM’s are playing is that the wave counting bears know when the count is off fairly early, leaving lack of real buyers to drive the indexes much higher than the previous highs. The shorts simply step aside and start shorting at higher levels; wash-rinse and repeat.
So if the bears take the indexes lower at the open, they still have a chance of seeing some follow through to the downside. All of the indexes went right up to resistance levels and were unable to break through. The highest volume of the day (which was a very low volume day) came in the last hour of trading. That was when we saw some selling pressure actually hit the tape.
The bears have a little more wiggle room left to the upside, but they are quickly being cornered once again. I would feel much better about seeing lower levels for the short term if we see the tape open down and not look back.
Bottom line: The bears need to step in Tuesday to defend the important pivot just above. They are still alive, but the walls are closing in again.
Mel’s Corner: This is going to be a new addition to our site for any members looking for the next day’s trend through a unique system designed by Mel.
Numbers range from -20 thru 20. -3 thru 3 are "null" signals.
Negative numbers are bearish, positive numbers are bullish for the next trading day.
Mel’s trend finder indicator gave a zero reading tonight, which is a null reading for the markets on Tuesday.
Sentiment Indicator: (contrarian indicators) The short term sentiment indicator (1-3 days) is in neutral/bullish territory. Intermediate term sentiment indicator (5-10 days) is in bearish territory. The longer term sentiment indicator (3-6 weeks) is in neutral territory.
Bottom line: With the short term in neutral and intermediate in bearish territory, we could see some chop tape over the next couple of days.
"Smart Money" Trend The smart money was kind of quiet today, but was seen on the sell side for a majority of the day.
For Tomorrow: Support for the spx sits at 1038-1036 and then 1030. Resistance pivots are at 1043-1046.
Gary
Today we closed out of: Proshares Ultrashort S&P500 (SDS) -0.29%
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