Monday, July 20, 2015

SPX, INDU, NYA, BKX Updates: No Title is a Good Title

Last update noted that markets were approaching prior resistance, but that we had yet to see any downward impulse waves to signal a turn.  After that update was published, SPX gapped open and was immediately met with decent selling pressure... but the relevant conundrum is shown on the chart below:

Of note, BKX does appear to have an impulsive decline: 

NYA's chart takes a further look at a near-term bear option (with at least the potential for a bigger bear option): (continued, next page)

I'm not exactly rabidly bearish at this current juncture, but I am inclined to test a few shorts up here.  That's not a trade based on "strong bearish conviction," rather it's based on practicalities:  The risk/reward for shorts is fairly solid at current levels.  Bears still have their work cut out for them, as shown on INDU's monthly chart below:

In conclusion, there's still no clear predictive pattern that's emerged from the noise zone, but we are now in a resistance zone, so the market may react to that -- and there is at least one market with an apparent impulsive decline (BKX).  The Great Noise Zone of 2015 has been a challenge for intermediate traders, but shorter-term traders have had a number of clear moments where the market tipped its hand and showed us what to expect next, sometimes to the tune of considerable profits.  Presently, I'm treating most trades as spec trades, and waiting patiently for the next clear signal to commit more fully.  Trade safe.

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