Monday, October 22, 2012

Late day rally fails to close above the 50 DMA

Today the market posted a new low on the SPX but then later rallied into the close to end in slightly positive territory but, STIL below it's 50 DMA.  Low volume also takes most of the strength out of the days positive close.

With the reversal candle that formed from today's price action a continuation of the late day rally is possible tomorrow and in the near term but, until volume returns on the up days we are still bearish and do expect any rally to be short lived.

Should a contra trend rally begin tomorrow I will protect my profits by moving my stops to 50 cents below today's low on the SPXU.  If this price triggers I will also put 1/3 of my portfolio into UPRO to play the rally.  We shall see.

Stay tuned and stay disciplined.  While the market is likely to continue moving down we can also make money on the bounces along the way.

see you back here tomorrow.

AJ Coops


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