I am having a hard time becoming inspired about tomorrow’s direction. The NYSE new 52 Week Highs tied yesterday in count, which if you were watching throughout the day they were running about 10% behind and that last thrust at the end of the day played catch-up. I think the market needs a rest. I know I do.
The only pattern that struck me looking at the ______ bull market (I’ll let you put your adjective in) rally since March 9th is the 3 or 4 green bars followed by red bar. We have now gone 5 green bars so we are certainly due, but like all those red bars in a row that killed me in February and March, these green bars could just keep marching along, perhaps putting in the top?
This 5 day thrust has been as strong as any since March 9th so if I was a bear I would be concerned because this does not look to me like a market that is ready to give up its gains. We still do not know if we are at the peak of new 52 week highs or if this is going to be a Tsunami.
Next week we head into OPEX (options expiration and futures too), I hate OPEX week, it is like the last hour of the trading day, except all week long. July and August had bullish OPEX weeks and June’s finished the last 3 days in a rally so in general OPEX has been good for the bulls.
For ECON data tomorrow we have Michigan Sentiment.. those have been coming in below expectation lately and have been bearish, and wholesale inventory numbers which might effect the market.
I took a small short position in BGZ at the close expecting to have a gap down opening tomorrow. I did the same thing the Friday before Labor Day.. that didn’t work out too good. My trade was based on a study I can’t find right now, but it showed an edge to shorting a 10 day high made with a 10 day high New 52 Week High and the candle closes green you should short. If the candle close red you should buy the close.
I have traded this rule 3x now with all 3 being winners to some degree, but my load is light as I learn.
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