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On this Thursday of trading, let's review what the markets are doing so far, and we'll have just a couple more interesting trade set ups.
NASDAQ - The NASDAQ put in a low that was a buy on August 21, and that has not been violated. It almost made new all time highs on Monday. It is still early enough in the daily cycle to break the highs and Tuesday & Wednesday looked like a back-test of the recent break out from the downtrend line. I would raise my stop to that point.
SPX - That sharp drop on Tuesday also looks to have back tested a break out. Day 11 and this can break to new all time highs too. Recently, breaking to new all time highs has not turned into a strong rally higher, the markets just keep rolling over into the next dcl, but it is slowly putting in higher lows and higher highs, and that is a trend higher. A bit of a rough ride for the BUY & HOLD investor.
TQQQ - So here is the TQQQ that many here trade. Tuesday, Wednesday, or even today you could add to your current position, with a stop below the 50sma. If you bought in at the DCL, I would raise that stop now that we've had the first drop out of the way.
Read More So far, the trades that we have been really focusing on have been excellent. We'll do a quick review and then discuss those trades and set ups.
DJIA - Wow, that wasn't a very healthy looking drop on day 9, was it? The DOW landed right back on the 50sma, so at this point, support is support. If this were to roll over and continue down, that means that this could still drop into an ICL. ( I never did call an ICL, just a dcl, but we are overdue for one).
SPX - As a cautionary note going forward, I mentioned that we had a buyable DCL in place, but using this weekly long term chart, it's easy to see a rising wedge in SPX. It is important to look ahead when we take on a trdae. That is called being alert and prepared, not biased , rigid, and foolish.
That way if we do get a sudden drop, we aren't surprised or overly biased and married to positions.
Read MoreNOTE: GAS PRICES HAVE SKYROCKETED IN THE U.S. THIS WEEK. We'll keep that in mind as we discuss the Energy sector.
NASDAQ - We got the follow through to that daily cycle low that I was expecting, and now we also have a weekly swing low in place. Stay long and watch overhead resistance. I do see divergence, as shown on this chart.
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