The Strategies And Cautions To Know At These Key Market Levels

Welcome back, everyone! This market continues to climb the wall of worry. We see virtually nothing but bad things in the news media regarding the economy. We hear about the trade war with Europe and China. We hear about Iran removing the dollar as a peg. We hear about President Trump and the Federal Reserve. All these different things and the negativity out there but yet the market keeps getting higher and higher and higher. This is kind of that age old adage that the market continues to climb the wall of worry. I talked to you in yesterday’s video about the distribution and accumulation. We really want to break above those for exciting longs or break down below for the shorts. This morning, from the get go it was all about the long-side trades. Both up to that resistance and then beyond. Let’s take a look at that on an intraday basis. You’ll see a lot of buy-side activity here. We fired off buy signal after buy signal then backed off of that buy signal and never fully went back to sell. We went back to the buy side pick off even to the time of this video at the lunch hour it continued to be the buy side. Lots of buy side activity with minor stumbles in the road. Where do we go from here? The key thing to understand is we have a negative divergence taking place on the S&P. We have a negative divergence taking place on the Dow but the S&P is breaking above some of that short-term resistance. With all that being said. The trend is your friend til the bend in the end. What’s going to happen with this is it’s still going to be focused on long-side trades as long as we stay above that same level I told you we want to break above with the Nasdaq. As long as we stay above the speed lines on the Dow, Russell and S&P, we’re going to be focusing on long-side trades. As long as the news is more negative, you will want to watch out for the economy is great or wonderful but I don’t think that’s going to happen with the animosity between the news media and the president. It’s not going to be the traditional gauge with other presidencies when you hear too much negative news that was time to buy and when you hear too much positive news it’s time to sell. You’re not likely to get the positive news environment. We want to rely a little bit more on the actual technicals here to guide us and watch out.

The reason why I bring the negative divergences is if any legitimate issues take place in the world, there is going to be a lot of room for profit taking. That’s when you’ll see one of those big red bars to the downside. It’s not necessarily a terrible thing to have some brief corrections in the trend but it is important to note that we are on the higher side of this whole thing. Right now, steady as she goes, I’m still looking for long-side trades. All the trades I fired off in the Live Trading Room were long-side trades. All the signals were buys. Both on an intraday basis and a swing trade basis, I’ll continue to look for long-side trades as long as we stay in the key levels on the indices that we talked about.

That was more of a general market update. I’ll get back to more specific markets in the next couple videos. You guys have a great night. We’ll see you in the Live Trading Room or in the nightly videos.

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