The Market Is About To Plunge (Day 8, Vol. 7)
Instead of more reasons, I'm here to offer trading advice this afternoon. As the Nasdaq has started getting shredded this morning, my reversal signals became more and more solid. If the market closes here or lower (SPX <914) we will print a very pretty reversal daily candle on all the indices but especially the Nasdaq. Look at a chart of the QQQQ (NAS 100 index fund) and tell me that isn't screaming bearish. The opportunity we now have is to short here.
If the market reverses north of 930, one covers and suffers a 15 point loss. If one is correct and we do have a top, we score at least 50 and probably 100 S&P points of downside in the coming month. That is about 4 to 1 odds in favour of the short position. With the Nasdaq already critically breaking down with stawlarts such as Apple getting smacked around, one can expect the rest of the market to follow it down. Especially since the market leader is the fundamentally insolvent and worthless Bank of the American Government (BAC). When it reverses, the XLF will collapse back into the single digits and the S&P will dive in sympathy. Now is the opportunity to get a low-risk high-reward short entry on this overpriced and overbought market.