Why The Market Is Not Safe To Buy Yet

Welcome back! Let’s take a look at the things you need to know for the markets right now. First of all, it’s a great rally this week but the reality is we had some great rallies in past junctures. We had a dead cat bounce that led to lower lows. It’s hard to celebrate yet. What we’re going to look for is to get above $26,000 and make that support. That will give us a little sigh of relief but the real sigh of relief won’t come until we get above $27,000. Once we make $27,000 a support level, then the market has a real opportunity for a bull run but based on historical precedence, it has gone down and stayed down. We’re going to be watching some currents and whirlwinds very closely. I’m not going to remotely breathe easier until we get to $26,000, make it support and take back off. I’m not going to get aggressively long until we get to $27,000 and take back off. It will lead to significant longs to the upside.

In the meantime, we’ll be watching where the longs come from in situations like these. On Monday, I was fortunate to do a class for our BBT Insider members where I talked about this. What we’re looking for in a down trend, you’re looking to get caught off guard. You expect another down day. What you’re looking for next is to break back up above the speed lines. With that being said, have a retracement and break above speed lines. What will happen is you will get a whoosh to the falling resistance like the 20 period MA or the downtrending channel that happened back over here. You’ll recall, when we got back to that level, as it was hitting that downtrending moving average I said there is no reason to be excited. We haven’t pushed back above this level, pull back and start to take back off. It’s one big fat resistance level still. Then the market moved back over. All that’s happened is we’ve rallied back up, hit that resistance. You’re talking the 2830 on the S&P, the 1520 level on the Russell, the 25560 area on the Dow and the 7232 area on the Nasdaq and the 12070 area on the Dax. We want to see those areas from being resistance to support and get that Dow back above $26,000. Until we get above that level, we can’t breathe easy. If we get above $26,000, you’ll see how we magically get above these channels. You’ll see how all these different levels and timeframes coincide with each other. Otherwise you run the risk of having more that happens historically where it falls to lower lows. If you want to avoid that, then you have to have the things happen that I’m talking about.

From a trader’s basis, one thing I want to point out is this morning, the market did what it does best. It tends to go on in the correct direction with as few retail traders as possible. As retail traders, we tend to look at things one dimensionally. The real art is to look at things from multiple time frames and multiple avenues. We were at a lot of these resistance levels kicking off the day. I was doing a special event for our student family this morning and I said no longs from my perspective at the open. That paints a really pretty picture. You have a nice green bar and you think it’s going to be a great day like yesterday but then the market turns around and crushes you. Even if it was going to go back in the direction you want, then you get stopped out. Timing is everything. Watch out for those fake moves in the U.S. open.

Let’s look at two different markets. AAPL has been firing off several different longs and was very strong. We were above the zero line on the Trader Rescue Package and firing off longs. Then we hit that resistance that I warned you about several weeks ago and the market started making these distribution levels and it was taking accumulation levels and they became resistance. That’s why I told you, there’s not a single thing that says go long from AAPL. Go back and watch my videos and you’ll see what I said. Sure enough, AAPL trucked down the last few weeks and is still underwater at this moment. Much like where I showed you we had to get back above these key resistance levels, AAPL has got these key areas to get back above. I want to get back above that zero line on the Trader Rescue Package and get back above the channel, make that support so that market can be more free to have a chance to recover. Watch those levels that I showed you on the Nasdaq.

Another barometer to watch on the tech field is Goldman Sachs. So goes Goldman Sachs, so goes the market. Goldman Sachs fired off a sell signal several weeks ago. It broke the channel and zero line on the Trader Rescue Package, then took a fall to our official target. At this day and time, it said this would be Target 2 and it went right down to Target 2 a few days ago, made an accumulation bar and bounced. In the big picture, this is a short-term reprieve. We still have the falling channel and we’re still below the zero line. We want to get back above both those things and see this market recover. Remember $26,000 on Dow futures along with Goldman Sachs getting to 198 and making it support. Those are what you want to see if you’re long right now otherwise you run the risk of deeper corrections based on historical precedence.

I wanted to get you up-to-date on those things. Thank you for those who wished me luck on those trading events in Europe. I’ll look forward to seeing some of you there at my talks. Have a great remainder of the week and keep an eye out for update videos. It’s going to be a phenomenal summer as it’s already proving to be. It’s going to be exciting!

Have a great night!

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