Hey Market Pilots,
The market continues to be dragged down by several cross-currents of events and information. We have the election, earnings, COVID, and lack of Stimulus. All these items are making people not want to put money to work in the markets and therefore prices keep sliding. In previous newsletters I had been viewing the decline as a pullback, looking for support, to then maintain strength.
This opinion of mine changed once the SPY ran into and got rejected by the underside of the Hourly 50 SMA. When that confirmed to the downside, I knew the doors could be opened below and it was possible to go lower.
When I was analyzing the market Tuesday afternoon before the close, I posted an alert to my Moxie members saying that I could see the market moving lower and why. I may not have known the extent of the downside move, but the setup and observation of it were spot on.
The market was heavy all day and there could still be more downside as price is still below MA’s like the 15 min 50. I can see that price is getting stretched to the downside and likely to bounce at some point, but we don’t know when that will be. Once the bounce happens, we need to see where it goes and if it moves up into overhead resistance, and if that is an opportunity for another down move.
Be careful out there, stay light, stay nimble, and hopefully things settle after the election.
Over and Out,
Your Profit Pilot.