What You Need To Know After Today’s Wild Ride On Wall Street

Welcome back gang! Well listen because I did not get to do a video last night because of the unexpected trip to the dentist I wanted to give you a market update tonight and then we will get on some special training in the next few days.

Well let’s talk about the market because we were getting some great moves this morning. I was shorting the market. In fact the last trade I put on this morning we were right before the eleven o’clock hour and rolled past the eleven o’clock hour and stayed with the room before I closed out my profits. We had some really nice moves. In the morning we had some nice down moves and then mid-day we had some beautiful up moves as you can see all the buy signals and then we transition right over to the sells to finish out the day.

So what is going on here? What is causing this in the market? It’s fun to trade these types of markets back and forth but what is causing it and what do we need to be aware of before we go into tomorrow morning session? So what is happening here is we have some key markets that have some major resistance and now because of the sell down into the afternoon we actually have some major support levels we have to be aware of. First things first, as we take a look at the S&P you will notice we have major inventory retracement bars or institutional retracements bars (IRB’s) because it is institutional money causing it. So what has happened yesterday and today we got back up in those areas and those institutions came in and sold this thing down and came right back in there and whacked you again today in the same exact areas. Meanwhile, we actually have a double distribution bar taking place over here on the NASDAQ. So you see there are two of these right in here. So basically what is happening this area right over in here is multiple layers of resistance all in the same location there. So what’s happening here is that we came up multiple days, four days now we came back up into those levels and got whacked right back off. So there is some clear well defined resistance right above us where these inventory retracement bars are. Two of them up there on the NASADQ, and on the S&P we got them very well defined. Both the ones that just got created here a few moments ago because the market is closing up and then the ones that were created about a week and a half ago. So there is very clear resistance at the top that now needs to be broken. At the same time because the sell down this afternoon that put us right back at some key support levels. We are just below the speed lines on the NASDAQ which puts us in treacherous territory for selling. We got the Dow right at several speed lines and long term moving averages and we got multiple support levels there. We got key support on the Russell and key support on the S&P.

So going into tomorrow, as you can imagine I am going to see, do we start breaking down below the paths least resistance at this point? From my perspective I would like to see the market break down below those speed lines and look for shorts. That would be my favorite trade at the moment. That is for stock indices specifically. As far as oil I would like to look for long side trades as long as we hold above $72. Today we had some good moves there nearly $73. So there are still things I am looking at on the long side. But I would like to see follow through on the long side because of the path of least resistance as you can see all this air to the downside. That would be my favorite trade going into tomorrow. The problem is it would turn right around and go right back up again and now you have that many more distribution bars that you have to contend with. That is going to make or a choppy ride and you run the risk as you push up you get long and then it whacks you back to the down side. That’s why I love to see the market tend to walk up the stairs and ride the elevator down.

So with that being said all of those factors combined that is my goal going into tomorrow. Preferred trader choice would be short but any long side trades will be very cautious as it relates to stock indices. We are going to want to see some of the other key markets coming along with that like thang stocks and stuff like that before I even consider taking a long side trade in all of this distribution. These are proven areas of selling by institutional firms. You cannot ignore that. We saw what happened today, if you ignore that you end up getting whacked. We were shorting in the live trading room this morning because we had the sell side taking place earlier this morning. You can see we had beautiful selling so we were focusing on the short side this morning. Going into this afternoon we had beautiful up-trends and then back to beautiful down trends. I would like to see us get below those speed lines and get back to selling would be the preferred trade of choice going into tomorrow. Those are some key thoughts and we will get into some special training here in the next couple videos.

You guys have a great night and we will see you shortly.

 

To learn more about Rob Hoffman Trader visit www.becomeabettertrader.com

 

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