"The trend is our friend." Indeed.
Futures are down about -1% across the board, and in terms of the cumulative $TICK (or $TIKRL, $TIKSP, $TIKQ -- take your pick), there is little to suggest any hesitation to the selling that we saw yesterday.
500 stocks/min-type selling started just after lunch and continued downward in an almost linear fashion throughout the afternoon, with only a slight pause at 14:00 EDT. We obviously sold off into (and after) the close, and the nervousness continues this morning.
If you're not short on the market (either by shorting or using a contra ETF), the rate of dropping here is largely unsustainable so I wouldn't jump in with both feet. You can see the impact of the rate of change of the selling -- the divergent spacing between the different length EMAs in the tick pattern shown in the bottom plot is spreading out as time advances, showing that we're falling faster intra-day than the length of the moving averages. This is important -- as long as the divergence continues to grow we can feel confidence in our short/contra positions, but when the change in the slopes start to abate and the lines become more horizontal, it's most likely time to take some profits off the table.
Read the GGT system status today, as well as Pascal's commentary on the 20d MF. We're back into single-digit % long stocks out of a database in excess of 2800 equities -- opportunistic buying on the long side here has generally worked for a short-term play in the past.
Regards,
pgd
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Originally Posted by EB
