The Momentum Change signals generated Monday and Tuesday continue to feel like a set up for a whipsaw. (which of course I have seen before.. it is not a perfect world) So the way to protect against a big mistake is to keep stop loss orders close by. I continue to be impressed with the short term action of the Transports, which again today are up even though the other major equity indexes are off. As this is written, the SPX is off 0.30% and the DOW off 0.31%, the Transport are up 0.35%.
Momentum is very close to flipping back to the buy side on the Hourly charts, which is what I have been expecting. It is true that the Hourly charts are always a guide to the near term switch in the daily charts, which are the source for the Proprietary Momentum Changes signals. This exercise is an art and not a science, and the old intuitive wisdom has been warning of trouble with the recent Sell signal. Which of course is why I did not make any trade recommendations.
Although the Hourly is warning of a coming flip back to a Buy signal, it is not yet there. It is very likely that I will see an Hourly switch this afternoon, and I will report that if it occurs by 3:30pm.
In the meantime, take a look at this report from Zerohedge on this morning BLS report of new Jobless Claims. It is another big miss on expectations, with a significant increase in continuing claims. Doug Short has some info here on the BLS report and a chart of PPI and CPI that is interesting. As all of his work is. He also links to one of my favorite charting blogs, Kimble Charting Solutions, demonstrating long term support in this area for the SPX.
Stay close to the computer today.. there maybe some trades coming.
Best To Your Trading!
Bill
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