So again, longs trying to trade for a few pts. got trapped today as it opened where it started yesterday erasing gains or holding a losing position. The pattern that formed today looks bearish still and I could be wrong by saying that we could see one more low before a bottom can be had, but with the sentiment and direction of the ST agreeing with my theory, I say the risk is minimal for being short.
Look for the intra-day to put in a positive divergence next week if we are to have a bottom of sorts. Any exit of the OS condition warrants profit taking, but for those risk averse I would say you might want to reconsider taking profits once the indicator turns bullish.
SEN: Bearish
ST: DOWN
PA: DOWN
The market is at risk now more than in August of 2015. This should not be taken lightly, and on top of the signals ever more bearish now than in August, we have not seen these bearishness or condition since 2011. When do we start seeing that sentiments are now going back further in time for comparisons to the situation that we are in now. Shouldn't this be a clue? I was pretty sure the clue I provided can be seen to the right of the page where it has not changed since June 9th when it signaled bearish and we cautiously followed and most likely rewarded.
If the low is broken next week, then things could get worse if it does not push back up above it with a couple of days time. If so, you should start looking for 1800 to dare I say it 1650. But lets not get ahead of ourselves.
Be aware that the 200 week MA is at 1780, which is not far from where we are now when looking at a weekly chart.
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