As of now, the market looks like it might bounce and since the 20DMF is close to its short level, if a bounce attracts sellers, we will get a "muddy" short signal. It will be "muddy" because of the Santa Claus rally everyone is expecting by end of year.
On the oil front, we only need one US official to ask a Saudi prince to comment on the price of oil being too low and a general bounce will ensue.
SCO is showing a divergence, but I guess that the Saudi prince does not care about charts.
It was fine to trade long XLE two days ago on an expected double bottom bounce, but once we broke the low, then the trade had to be exited. Not sure I want to try this path again soon.
But... NatGas looks like it is attracting money!
There is some weakness in the USD due to renewed strength in the Euro, which has delayed QE until Germany is more amenable. I'm guessing there needs to be more risk of a breakup of the Euro zone before QE is introduced, and this will not happen in the next few months.
And gold looks to be the most positive of all the possible investments today.
Conclusions:
I will increase my SDS long position on a market bounce if the MF shows a negative divergence.
