Good morning everyone
The good news is we no longer have to worry whether or not the support will be tested. That has clearly been answered and we have to move on the next question. Will support hold? I suspect with some of the big banks reporting on Friday and early next week that hope of positive numbers will prevent the big guys from getting full-on bearish just yet. That, however, doesn’t mean that we could see a quick move below support simply to sweep out stops so don’t rush in if we see a little bullish push right at the open.
If you are a long-only trader let me suggest taking the rest of the week off. Wait to see if earnings can, in fact, break the downtrend. Until that occurs the bears are in control and they love to steal the lunch money of traders high on hopium predicting a bottom has been made. You risk almost nothing by waiting for proof except maybe bragging rights if you do happen to get lucky and pick the bottom. If you are that kind of trader it’s better to go to Vegas because there will at least bring you free drinks to dull the pain of watching your money disappear. That may sound a bit harsh but it’s the truth. You can thank me later.
Trade Wisely,
Doug
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