Dow Jones & S&P 500 Analysis! Caution in the Markets!
Hey Traders, Caution in the Markets! As we all know, we have had this massive bull run (fueled by nothing other than Cash and Words) however we have not had a decent pullback or correction since this bull run began several months ago. I do think the Markets will move higher but I am not a gambler and I would prefer to wait and see. As of right now, we are seeing a Lower high, Lower Low, and Another Lower high! We may be heading for 100 period moving average (Shown on chart below).
These Markets are due for a pullback but do not be surprised if they shoot higher over the coming weeks. I personally am leaning towards Neutral bearish for the time being. Until I see the price make an effort to head towards the recent highs, I will be a little light on Long positions and I will be hedging the Long positions that I do have.
This Is a tricky situation because the Markets have had plenty of reasons to sell off over the past couple weeks and they haven't! This tells me that the markets want to move higher. However my experience tells me that there is a Lower high, Lower Low, and Lower high on the charts. There is also a descending triangle on DJI (shown below). The Markets may just be taking a breather and getting ready to hop up for another bull run but I will not be jumping in front of the markets. I will personally be light on Longs for now (with hedged positions) and a little heavier on the Shorts!
This is how we avoid getting caught in a crash! If you do this for a living, you will get caught in some sort of flash crash or crash at least once in your career but you can avoid being caught in them by looking at the markets with an unbiased view and not chasing the trend! Also, this is why it is so important to hedge positions.
Look back at most of the major crashes and you will realize that most of them began with a Lower high, Lower Low, and Lower high! Again I am not saying the markets are going to crash because I actually think they are moving higher over the next 2-3 months but this is cause for concern and I wont be betting on the markets moving higher until I see how this plays out!
I Hope this was helpful, please feel free to share your analysis or any questions you may have! Good luck trading!
These Markets are due for a pullback but do not be surprised if they shoot higher over the coming weeks. I personally am leaning towards Neutral bearish for the time being. Until I see the price make an effort to head towards the recent highs, I will be a little light on Long positions and I will be hedging the Long positions that I do have.
This Is a tricky situation because the Markets have had plenty of reasons to sell off over the past couple weeks and they haven't! This tells me that the markets want to move higher. However my experience tells me that there is a Lower high, Lower Low, and Lower high on the charts. There is also a descending triangle on DJI (shown below). The Markets may just be taking a breather and getting ready to hop up for another bull run but I will not be jumping in front of the markets. I will personally be light on Longs for now (with hedged positions) and a little heavier on the Shorts!
This is how we avoid getting caught in a crash! If you do this for a living, you will get caught in some sort of flash crash or crash at least once in your career but you can avoid being caught in them by looking at the markets with an unbiased view and not chasing the trend! Also, this is why it is so important to hedge positions.
Look back at most of the major crashes and you will realize that most of them began with a Lower high, Lower Low, and Lower high! Again I am not saying the markets are going to crash because I actually think they are moving higher over the next 2-3 months but this is cause for concern and I wont be betting on the markets moving higher until I see how this plays out!
I Hope this was helpful, please feel free to share your analysis or any questions you may have! Good luck trading!
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