INVESTORS SHOULD SHORT THE MARKET
Thursday was a lackluster day and the Dow spent all day trying to find some direction from the market players. It was down then up and at close it was down again. It is our view that a correction is under way and the readers should sit on the sidelines till the market wears off the overbought condition.For the day the Dow was down about fifty points and the Nasdaq were off by .15 percent. This selloff brings the support of the SPX lower and it should find support at or around 1470-1475 area. This will be a decline of about 25 points in the SPX. Today’s action suggests that minor wave 3 has completed and we could decline in a 4th wave to 1470ish area. On the way down we should expect support around 1483-84 area in the SPX. A good area to short would be 13,900 in the Dow. Short term support is at SPX 1470/75 and 1460/65, with resistance at the 1499 and 1523 if the market starts rallying from here. Short term momentum dropped to quite oversold after yesterday’s negative divergence, then bounced to neutral before heading lower again. The short term Dow and SPX charts remain barely positive with the pivot level now around 1497. miakulpa have the analysis report.
Author Name : Zafar Sheikh