The Momentum Changes indicators have been deteriorating since the last Buy signal. The McClellan has moved negative and Sentiment is going to flip to negative today. Yesterday, the IWM and the QQQ flipped to Sell, while the SPY remained neutral.
This morning, with the weak open after being off overnight, the SPY Momentum Change signal turned to Sell. However, the Transports remain on a Buy signal, and in spite of the sell off in the DJI and the SPX, the Trannies remain on the plus side this morning. For the last several weeks, the Trannies have been leading the market and I want to trust their guidance here.
All of our recommended trades have been sold with handsome gains, with the exception of the Copper JJC ETF, which lost 1.05. Any existing Long positions are in jeopardy and should be protected. However, I do not like the Short side of the market today..... it feels like a whip saw that is news driven. The Momentum Change indicators are coming late in the decline, driven by disappointing earnings at ALcoa, Japanese radiation fall-out and a sell off in Oil.
While the SPY has taken out the near term support at 131.90, there is still good support at 128.5. When entering a trade, I want to have a target in mind that is larger than 3 SPY points. But plans don't always work out, and I settle for less than I hoped for. However, a new trade based on the new Momentum Changes Sell signal at this point does not seem worth the risk. I want to see momentum when or if the SPY sells down to 128.5.
Best To Your Trading!
Bill
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