I am not sure what tomorrow will bring but I can say one thing: This market is ugly. Unfortunately, it is not ugly enough to have a long-term meaningful bottom. As each day goes by the charts in my scans get uglier and uglier. I have very few nice charts and the ones I do have are not that nice. The shorts on the other hand have been working really well. That combined with all the fresh charts breaking down tells me that there is more downside to come in the short term.
A bounce should be expected though, since the market can not go straight down. And if it does go straight down, I think we could have an October crash. But I really doubt that is going to happen and see any rally just leading to more selling later on.
How to know when the downtrend is done? Wait for the stock market major indexes to close up, then watch for a follow-through accumulation day in the next four to seven sessions. A follow through day normally consist of the markets closing up 1.5% or more on volume much heavier than day before and the volume also being above the 50 day volume average. If you get that along with a lot of beautiful breakouts on well formed stock charts you will know it is safe for the time being to go long again.
Beautiful green charts is something that is not out there right now and it is going to take some time for those pretty charts to show up again. While that time passes, keep cash high and keep paying attention to the market. That way you will be ready when the market is ready to go into a bullish uptrend.
New Swing Longs: PGR XTXI SSY
Longs Outperforming Market: ADST-78%, TGC-102%, SYS IED ESLR BRLC
New Swing Shorts: DXCM RGLD SINA ALB CRI PQE BHS CNSL
Shorts Outperforming Market: LZB-20%, CNTF-49%, EVVV-25%, LEND-21%, THLD-16%, NAV-15%, RUTX NVR NDE CORS PGL CBL NJR LEE TRID LTM BUCY CMLS BRKL ALDN KERX WLS LEN RAS
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