Hey Market Pilots,
The markets look as though they are in slow motion as they run out of upward momentum and begin to decline. But under the surface, individual tickers are getting pummeled. The landscape of those tickers should be the indication, or guides, as to what may be in store for the major indexes.
Another indicator that showed up the week of March 15th was a Daily Inverse Trampoline on the SPY. As part of my Moxie Indicator trading rules, an inverse trampoline setup can be a very bearish indication. It occurs when price is over a 50 SMA, but the Moxie Indicator is below zero. It essentially represents a false long condition, and so when that fake upward energy runs out, price tends to come down in a significant way.
In the screenshot below, we can that the Daily Moxie Indicator has been heading downward for quite some time, finally crossing zero, then with a little green bump, and continuing lower again. It was right after the green bump that told me the Inverse Trampoline setup was pretty much in effect.
The next piece we can see is that price just got rejected by the underside of the Hourly 50 SMA at the same moment the Moxie Indicator crossed below zero and fired a bearish Price Trigger. If all of this were positive, it would be the strongest long combo I have as far as trade setups go, but since this is firing negative, I have moved to 98% cash.
There certainly are opportunities to play the short side, but I tend to avoid them because they can be trickier. That said, I think the market could be in for some rough days and you should prepare for that. Any big down move in the market has always had a negative Daily Moxie before it.
Over and Out,
Your Profit Pilot.
If you are having trouble making money in the market or figuring out how to interpret charts, join me live on Wednesdays at 10:30 CT. I navigate the markets and answer your ticker questions in real-time. If it resonates with you, I would be thrilled to have you on the journey.