Well Traders, the day started with a little hope for the Bulls, but that was quickly dashed as the $NDX fell $25 points at one point before "rallying" at the end for only a $17.79 loss for the day. This puts the index at $1,779.02 which is very close to my "sweet spot" of $1,775.The MACD and STO are still showing weakness, so I think there is a few more days of downside left, perhaps to the $1,750-$1,761 support area? Also, the 30DMA was pierced today giving me another "ally" to slowing any move to the upside. The more barriers the better as far as I am concerned.
Today's action also created a "Bearish Engulfing Pattern" which according to Investopedia, is "A chart pattern that consists of a small white candlestick with short shadows or tails followed by a large black candlestick that eclipses or "engulfs" the small white one. As implied by its name, a bearish engulfing pattern may provide an indication of a future bearish trend. This type of pattern usually accompanies an uptrend in a security, possibly signaling a peak or slowdown in its advancement. However, whenever a trader analyzes any candlestick pattern, it's important for him or her, before making any decisions, to consider the prices of the days that precede and follow the formation of the pattern."
This may seem to indicate that Friday's little bounce was an aberration, and more Bearishness is imminent.
At this point, my trade is already profitable and the prospects for a close out for maximum profit seem excellent. As always, we always play defense because what the market giveth, the market taketh away.
Happy Trading!
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