BROAD STOCK MARKET UPDATE (2:15 pm EST)
The top and reversal in equity markets that we got on Monday has been brief and now the DOW, S&P 500 and NASDAQ are reversing back up. In my trade alert on Monday I suggested a tight stop loss for our short position based on the S&P 500 and NASDAQ both making new highs for the week. At the time of this writing (2:00 pm EST) the S&P 500 is breaking to new highs, but the NASDAQ is still below last week's high of 4,746 so traders may or may not be stopped out of short positions. We are entering another reversal zone for the broad stock market next week (the center point would be March 16). If the NASDAQ stays below 4,746, we still have a case of intermarket bearish divergence in a strong reversal zone and thus another chance for a top and significant reversal. The chance of a reversal in the second half of next week looks especially strong so I think it is worth chasing this short sell (with a tight stop loss) into that time frame. Traders who have been stopped out may wish to look for another chance to sell short next week. Those still short can hold their short position for now (unless the NASDAQ breaks above 4,746) in anticipation of another top and reversal next week.
The top and reversal in equity markets that we got on Monday has been brief and now the DOW, S&P 500 and NASDAQ are reversing back up. In my trade alert on Monday I suggested a tight stop loss for our short position based on the S&P 500 and NASDAQ both making new highs for the week. At the time of this writing (2:00 pm EST) the S&P 500 is breaking to new highs, but the NASDAQ is still below last week's high of 4,746 so traders may or may not be stopped out of short positions. We are entering another reversal zone for the broad stock market next week (the center point would be March 16). If the NASDAQ stays below 4,746, we still have a case of intermarket bearish divergence in a strong reversal zone and thus another chance for a top and significant reversal. The chance of a reversal in the second half of next week looks especially strong so I think it is worth chasing this short sell (with a tight stop loss) into that time frame. Traders who have been stopped out may wish to look for another chance to sell short next week. Those still short can hold their short position for now (unless the NASDAQ breaks above 4,746) in anticipation of another top and reversal next week.
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