Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
The Big Q: To buy or not to buy?
The Big A: Maybe yes, maybe no, see below.
Looking through the selloff, find the stocks that held, lots of good ones did. Then watch to see if they hold up during further selling Monday and Tuesday, if there is further selling and they hold up, you have
some great candidates to play to the Northside.
And then play a bounce until the bounce stalls, the exit, and play the Southside with stocks that
rebounded but ran into resistance such as their 50-Day MAs.
After that, play the relief bounce again, careful to note where the rebound stalls. If at the 10-Day EMA, that is the making of a strong downtrend.
If that happens look to change mindset from buying for long term holds to selling the rallies back up to near term resistance, playing the decline, as that then becomes the trend.
If there is no more selling Monday, the move is really suspect and the bounce should be treated as relief.
There will be good patterns set up, because as of Friday there are healthy normal pullbacks. You have to be very savvy and on the ball to play this kind of action.
The big test for the DJIA, SPY and QQQ at the 50-Day MA’s and certain Fibo retracement marks.
Good stocks will be looking for support in here, and they can be the bounce marks for the relief
moves. Just how they react, and then how they hold the moves will tell the stories.
For now it is a matter of watching for potential bounce points, watching stocks and indices as they approach those and see what looks as if it is in position to make a good bounce.
Then play the bounces.
The Key’s; strong volume, good breadth or weaker trade and narrow breadth The former is Nothside positive, the latter is Bearish.
Plot the rebound, then set up for the next move whether Northside or Southside.
If the relief move fails, that is when to move to Southside plays in earnest.
Again, pay attention, it is your money and your responsibility.
The Bulls Vs The Bears
VIX: 17.31; +3.84, or +28.5%. As it should. It did not run up during the latest leg, so this is not indicating a major Top.
VXN: 20.66; +1.51
VXO: 16.82; +3.38
Put/Call Ratio (PCR) CBOE: 0.90; -0.01
The Bulls and The Bears
Bulls bounced up just below the cycle high 67.0.
Bears fell to cycle lows at 12.6, at around 30 year lows.
The Bulls are at 66.00 Vs 64.7 last
The Bears are at 12.6 Vs 12.8 last
Support and Resistance
DJIA close: 25,520.96
The 20 Day EMA at 25,858
26,439 a Jan 2018 high
26,617 the Jan 2018 all-time high 26,000 from Jan 2018
The 20-Day EMA: 25,740
The 50-Day EMA: 25,130
24,835 from Dec 2017
23,608 the Nov 2017 high
23,602 a November high
The 200-Day SMA: 22,703
S&P 500: Closed at 2762.13
2808 from Jan 2018
The 20-Day EMA: 2782
2850 from Jan 2018
2873 the Jan 2018 all-time high
2751 from Jan 2018
The 50-Day EMA at 2728
2694 a Dec 2017 high
2597 the Nov 2017 high
2569 is the upper channel line from the 9 March 2009 uptrend channel
The 200-Day SMA: 2532
NAS Comp close: 7420.95
The 10-Day EMA: 7363
7506 the Jan 2018 all-time high The 20-Day EMA: 7301
7300 from Jan 2018
The 50-Day EMA: 7108
7,000 from Dec 2017
6914 from Nov 2017
6796 from Nov 2017
6737 the Y 2016 trendline
6641 the Oct 2017 high
The 200-Day SMA: 6533
Have a terrific week.