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Futures are down marginally this morning but did bounce at the 4562 support.
I am still on the side that we will see some more backing and filling before another try higher, but I am also thinking the trade isn’t going to be an easy layup.
Support has always been 4500-4450 -4400.
Buyers stepped in at the 4500 support and the bears have not been able to get the momentum to pick up on the downside.
I would be a LITTLE conservative here if short and maybe even put on the neutral hat.
The 130 point drop was fast and did get above our 100 gain thresh hold, but the first entry at the 4500 and 2nd at 4600 has me pretty much right at the breakeven marker.
What I DO NOT want to be doing is holding a position and hoping it goes down before up.
Some trades are easy and some are not so easy.
One can simply place a stop above the recent highs and see if we get down to the 4450-4400 support, but I definitely want to put a cap on this trade.
This does NOT make me bullish on the market and before the year ends, I think 3500/3600 is more likely than new highs.
But for now, we are NOT in a bearish time period and the bears are having issues getting the price down, so be careful-that’s it.
And make NO mistake, if we see a 200-400 point drop from here, it would NOT surprise me! -Gary Dean
Momentum: Overbought
Divergences: None
Resistance Levels: 4590-4605-4635
Support Levels: 4562-4540-4520
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