I go away for one day and all heck breaks lose on the market. We said earlier this week when our long side momentum got firmly established that we expected to see some correction. This was a bit more than I would like to see, but then when there is a lot of volatility in the market this is what you get. Lets see how much damage was done to our long side momentum trend.
In looking at our momentum charts we see that our slow or long term momentum continued upwards after Thursday market and then took a turn down. The good thing is that it is still solidly in the neutral range, and near the positive momentum mark of +5. Moderate momentum also continued up on Thursday before taking its down turn. It had reached a fairly high water mark or oversold area on Thursday, so again, Friday was not abnormal for that reading. Our fast momentum actually started to roll over early in the week signaling the coming correction. It has plunged two days, telling us it is quickly reloading for another move to the long side. The fast momentum needs to reload quickly from here to prevent the slow and moderate momentum to pick up an downside mo.
In summary here are the good things to take away after Friday. Of the 85 equities we track, 44 have positive momentum, 18 are neutral and 23 have downside momentum. Our long term momentum is still in the neutral range. I didn't see any serious volume numbers to raise concerns.
Its not a good idea to get aggressive either short or long after a day like Friday. We need to see what Miss Market is going to tell us about where she wants to go next. I am sure there will be some talk whether this is the Friday that sets up the catastrophic Monday - maybe, but I don't think so. At this point its best to sit back and watch for a couple of days. I am of two minds right now. I am going to protect my open positions, but I am going to watch for a market snap back. If that doesn't happen in the next few days, I will pull out my short pants.
Don't forget to check out our Top 25 ETF and Stock Recommendations and an update on our TradeWinds Black Box.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment