Well, we are finally being dealt the dreaded evening star bearish candlestick formation. And the worst part is that it is occurring at the level of GW2 which is usually an indication of a topping pattern. In a manner of speaking, the probability of a nasty correction is high. So, hold on to your rail or cut your losses.
Like The Fly, I’m building up cash by getting rid of my swing trades except for the recent biotech I’ve bought ($MNKD & $APRI) and $FB. However, once these three start to turn red, I’ll dump them for cash.
Below is the daily $SPY chart:
Look at that ugly red bar today? Yuk! Notice also that the short-term up-trendline is broken soundly as of now.
Currently holding 43% cash.
Be safe.
My 2 cents.
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waterfalls aplenty in spider land: SDY XLE XHB XLF XRT KRE (whoa!), engulfing candles XLY XLP
Yes, that is why it is good to be in cash if you are not short already. The Fly calls the cash hoarding perfectly.