The broad market correction in stocks deepened this week, with Thursday’s bloody sell-off proving to be the seminal moment. Some obvious levels of support on the major averages were breached, compelling traders to largely protect capital in the face of trapping price action to either direction.
Thus far, the market has been putting in its time and paying its dues to correct any of the froth we saw in the spring. As an example, consider the monthly chart of the BKW Bank Index, below. Note that major, multi-year resistance levels do not seem to mean much in a roaring bull market…until they do. In this case, support levels (light blue line) from 1998-2003 are just now starting to assert themselves as potential resistance, with the financials pausing or suffering profit-taking.
Going forward, the pertinent issue is whether we are near the low end of a tradable summer range, or instead are only now just beginning a deeper correction. I will cover those issues in detail and much, much, more–including a multitude of actionable trading ideas, price levels to watch, and educational material–in my Weekly Strategy Session, set to be published on Sunday (please click here for details).
Have a great weekend and I will see you there!
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Thanks Chess! May I ask what was your major at school ? You’re brilliant trader and business person.
I earned a PHD in pimpology.
I slay the hearts and minds of women worldwide!
LOL!
JT,
Thank you, That is way too kind. I have a law degree and am still licensed to practice in New York state. I have two undergrad majors in liberal arts and a minor in economics.
Perfect !!
Looking forward to the strategy session. I refer back to each night throughout the week, it’s a great feature in 12631. Thanks for the trades this week Chess!
Thank you, Tpain! It is great having you as an active member inside PPT and 12631.