More Distribution - December 20, 2011

[Billy]

Forum Clusters 111220.xlsx

Monday was the “bad” day needed for IWM to close below the massive cluster of floor levels ranging from Quarterly pivot (71.25) to Weekly pivot (72.48). Their total resistance strength is 30, overwhelmingly superior to the first support cluster with a strength of 6.

IWM already closed there last Wednesday, but the 20 DMF had not issued a sell signal yet. Each day since then has been characterized by a gap open reversed into distribution by large players. Yesterday was not different and we’re back under the main cluster, this time with a robot short position and also a sell signal for a new position at a limit entry of 70.81. Another gap reversal today below support would lead many bulls to capitulate and a fast move down to Weekly S2 (68.46) would be quite likely.



GDX keeps falling quietly but surely and the trailing stop (55.48) is now below the initial entry price of 55.96. It is approaching a strong support cluster where a bounce might develop. There is no edge left for entering a new position.
Billy