6 May 2015 - OS Heaven

The longer we are in OS the longer the distance of price entry to current price.  Of course this will depend on when you actually entered short.  The volatility reared its ugly head at the end of the trading hour where price managed to rally 20 pts. on the SPX.  That said, any cushion you can get on an acceleration down helps you exit with a profit, this is why I am fixated in the analysis of OB / OS conditions.

There seems to be a positive divergence forming on the intra-day charts, so expect a move out of OS tomorrow.  Divergences does not always guarantee a reversal, but we can be prepared for the possibility of it.  Since the market has been jittery and impulsive in each and every direction, we need to find a strategy that gives us maximized profit.

On a daily basis, prices are now being supported by the 75ma and its lower BB line.  Any break of this support could push us lower to 2050 or 2040.

MT: UP
ST: DOWN
PA: DOWN