This could be foreshawdoing of a pop in the a.m. tomorrow while this retraces back allowing the moving averages to catch up to it but this is ultimately a bullish pattern (cup/handle). It hit previous resistance towards the close and just ran outta gas, but if tomorrow’s decline on the Vix is orderly it might be prudent to add to existing shorts and/or open new short positions.
There were a few other secondary indicators such as put/call and tick suggesting sellers may be exhausted, but I think the move up on the Dow will be short lived. If you have been reading my blog for any length of time you should have made money today as ,I have been bearish for weeks now pointing out that no real fear is in the market and that a bottom couldn’t possibly be in. Anybody trying to catch a bottom here is going to get slaughtered. It’s like in the late 90’s trying to predict a top, it can’t be done. We are in that type of momentum market, but this time it’s to the downside and it’s as irrational as they come.
