Technically, this was not a good day for the bulls, even if volume was still light. The 50 day moving average did not hold for either the S&P or Dow, and the Nasdaq broke back below both of its short-term moving averages. The key levels I am watching right now are 2360 on the Nasdaq, 1260 on the S&P 500, and 11,290 on the Dow. I mentioned this weekend that I expected a little more sideways chop this week before we headed lower, but if those numbers are broken tomorrow or Wednesday, then I would be looking to get more short more quickly than I expected.
The only thing I did today was take a short in MON at $116.81 midday. This touched its 50 day moving average in the morning and reversed from there. It may bounce from here, but I figured that with a stop above the 50 day, it would be a low risk short with possibly a good reward. I am back at work now and for some reason can’t get Telechart installed back on my computer, so to be honest, I was a little lost without it today in terms of looking for other shorts intraday. Hopefully, I can get that taken care of without a problem.
As I said this weekend, we are now in a position to watch and try and time this breakdown. I do think it will happen – perhaps today will be the start – and I want to be short when it does. With the low volume, anything is possible tomorrow – we could be up 200 points – but as September approaches and the big boys come back to play, I still think this market is in for some pain. Be careful out there, stay away from longs right now, and be on the lookout for nice, low-risk entries in shorts. I’ll be back later with some charts.
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