The Nothing Day

Today was a nothing day, anything that happened you should pretty much throw out the window and forget, no one was trading.  We are still trapped under the upper trend channel on the $SPY after breaking out of the bull flag put in last week.  Negative divergences are forming on the hourly chart which should raise a red flag as we are at the top of what has been a sell the rip range.  The 5 day moving average continues to hold strong and still rising.  Getting short here would be foolish, but raising some cash is the smart play.  If we break to the upside it will be on large volume and fairly evident.  The next few days will be very important as the market attempts to work off overbought readings by correcting through time instead of price.  If we can make it to Friday without a move below the 5 day moving average, I believe that gives us a green light for 1200.

It won’t take rocket science to figure out what’s going to get us there.  Crude is about to blast off again, gasoline is a step ahead breaking the bull flag as it put in a strong close.  As I’ve been saying for a while, the next leg up will come from crude and gold, get some exposure to oil service $OIH and the strongest gold miners in the $GDX.  Don’t futz around with the laggards, this rally has been about buying the big momentum names.

I’ll be traveling to the trader expo in Las Vegas tomorrow, if you’re going to be there by all means shoot me an e-mail so that we can connect.

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