Today was kind of a wash on Wall Street. The market was lower but after being up a large amount yesterday, it was good to see the bulls not give that much back in terms of losses. There was obviously no follow-through for the bulls today, but the market was slightly overbought coming into the session, so I don’t think that is a big deal. A few more days like today (relatively quiet trade) would be very good for the bulls and would make me reassess my current bearish stance. Quiet, low volume days are typically bullish after big, one-day moves.
Nasdaq 2 Week Chart
I made two trades today, entering QID and BGZ at the open. I said I did enter QID yesterday, but ThinkorSwim was having some major issues throughout yesterday’s session and my order from yesterday was not placed in my account until this morning. Both of these trades are obviously bearish in nature, as I still believe the burden of proof now lies with the bulls after the past two or three weeks of selling. If I am wrong, I’ll get out as I always do with small losses and get ready to go long.
Overall, not much changed today. I will use yesterday’s highs as a key level in terms of measuring the bulls strength here – if they can get above those highs, then they are back in the game. It would be better for them to rest a bit first, but we’ll see what happens. A break of 2680 could be a key move for the bears. Overall, the signals remain bearish so cash or selectively shorting remain the strategies I am using for the time being. Good luck Wednesday.