Hey Market Pilots,
In my last newsletter, I wrote about timing the pullback in the market. Within that, I wrote that the first bounce was the easy part and the difficult part was figuring out the path of the market after the bounce. We currently find ourselves at the junction, trying to figure out what is next.
To further muddle the situation, the FOMC notes were released Wednesday afternoon and then quad witching is Friday. Both of these events can have significant effects on the market. Not always, but when they do, it can be in a big way. It has become a rule of mine to wait until the day after the FOMC in order to help mitigate any surprises. And with quad witching the day after that I’m kind of stuck between a rock and a hard place.
One more factor on top of this already difficult circumstance is the technical setup of the charts. As part of my teachings with the Moxie Indicator, I have a setup called the Inverse Trampoline. It is a bearish setup that consists of price being over the 50 SMA and Moxie being below the zero line. This setup helps keep me out of a false long entry or go short.
In this case, I’m not planning to go short but I’m very aware of this condition and how it could have some significant effects on the market if it comes to fruition. There is a good chance there may be no major trades for me this week until all this dust settles. Let’s continue to wait and watch, making sure we don’t step right in front of a bearish signal.
Over and Out,
Your Profit Pilot.