While it took a while for the market to make up its mind which way it wanted to go today, once it made its commitment it really never looked back.
Day Trading today brought in 5 1/4 points, but 6 of those points were off the fade from the open and I did not have an Internet feed at the time thus I was unable to send the signals real time. The only real time trade today was a short for a 3/4 point loss.
The probability model for tomorrow goes both ways, but says that within the first 1/2 hour we will know which outcome is most probable.
The model calls for another stellar move higher, but if this is to hold true then the open tomorrow must be within 3 ticks of the low and the market should start very strong right out of the gate.
The other side of the model calls for sharply lower prices for the day, with a key reversal after the market rallies to the 62% retrace level, which would be about 8 S&P points from current levels.
So while the model is generating mixed signals, it does provide for which should be correct with the conditions I have laid out. We will have to wait and see what tomorrow brings, but I have a feeling that regardless of what scenario pans out it will be an exceptional day for day trading!
If I had to make a call one way or the other I would side with the rally and then lower prices.
The first leg down formed in a way that says it cannot be the end of the decline, so we know at the very least that 1490 on the S&P 500 cash will not hold up. We are also very close to some strong resistance that should prove to reverse prices. Lastly, there continues to be an abundance of bullishness short and intermediate term. This needs to be weeded out and lower prices are the only way to do that.
With all that said I suppose I could have saved myself much typing by just saying
BE A SELLER OF STRENGTH!
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