On the back of the hammer that we printed yesterday, you would think we would have seen more enthusiasm from the bulls today. However, so far we are seeing an uninspired effort with no conviction either way. Seeing as we remain below the 20, 50, and 100 day moving averages, with lots of other tough resistance overhead, this does not bode well for a sharp recovery to the correction. On the other hand, we are still relatively oversold, so chasing shorts down here is probably not a good idea. What we are seeing now is as close to no man’s land as you will probably find in the stock market. The short term chart should illustrate this point, seen below.
As I am writing this, I see that we just gapped lower. Just as I noted yesterday, trying to anticipate an inflection point is a money losing strategy over the long term, despite short term luck. Believe me, I am just as anxious to put my 100% cash position to work as anyone else, but I am not seeing good setups. How I feel about that is irrelevant. Either the trade is there, or it is not. Try to force it, and you are making a mistake.
With that said, you should not choose to turn off your laptops and walk away. The character of the market can change at any moment, so it is important to watch the action closely, even if you have no vested interest at the moment. Sometimes, being a spectator–and only a spectator–is a necessary part of being a profitable trader.
I am looking at 1128, 1125 and 1115 as key support levels for the rest of the day, with 1142 and 1150 as resistance.Twitter