Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
Beginning mid-afternoon Thursday and into the close Friday participants saw 1st hand the power of the of Wall Street when it moves the market South, as over 1-B/shares were exchanged on the NYSE.
If there is a bounce early this week it has hold in the face of the heavy selling
At 3:12a Monday as I write this report the major US stock market futures are trading sharply South.
On the bounce if there is one early, prudence dictates using a bounce to close positions., and wait for opportunities to put onnew positions should the market reverse the Southside day and continues back to trend higher.
Wall Street’s Southside action is important, but investors would prefer a rebound to set up better entry points Vs where they closed Friday, expect more selling.
A market has to have leadership to move higher, and if more of the leadership groups reverse trends or break patterns then the Northside’s chance of returning is lessened.
Always respect Wall Street when it is selling the market, so “never stand in front of a moving train.”
There will always be a trade.
The Bulls Vs. The Bears
VIX: 17.5; +17.5. VIX rose 40% but is only at 17. 30 starts getting interesting, 40+ is more important when considering a recovery.
VXN: 17.96; +17.96
VXO: 17.36; +17.36
Put/Call Ratio (PCR) CBOE: 1.18; +1.18, six 1.0+ readings in 3 wks, several more to come.
The Bulls and The Bears
The Bulls faded without hitting 60 and The Bears are climbing, as it should be.
The Bulls are at 52.5 Vs 55.9 last
The Bears are at 22.8 Vs 20.6 last
Support and Resistance
DJIA close: 18,089.69
18,181 the Jul 2015 high
18,168 the Apr 2016 high
18,247 the Aug 2016 low
18,288 the Mar 2015 high
The 50-Day EMA: 18,345
18,351 the May 2015 high
18,595 the Jul 2016 high
18,669 the Aug 2016 all-time high
18,016 the June 2016 high
17,978 the Nov 2015 high
17,600 the bottom of the April to June 2016 trading range.
The 200-Day SMA:17,566
S&P 500 close: 2127.81