Where Now?

The market moved lower today and all of the major benchmarks came close to filling the gap from Friday (9/3). IWM has actually closed the 8/11 gap and the 9/3 gap with only the 9/1 gap left to fill. The other three major benchmarks (SPY, DIA and QQQQ) have yet to fill any of the three so it should be interesting to see what happens over the next week or so. My guess is that we will see the three aforementioned indices close the 9/3 gap and then proceed to move higher t close the 8/11 gap before a true tumble occurs and the indices close the 9/1 gap. Of course, I could be wrong, but that is my educated guess at the moment.

Serge from ETF Corner has a chart that is in line with my thoughts for the market over the short-term. http://www.etf-corner.com/markets/2010/09/spy-if-i-had-a-crystal-ball-.html

I am currently sitting on my hands waiting patiently for a set-up that fits my style of trading. High-probability, mean-reversion trading is my game, so I am waiting for one of the ETFs that I follow to hit a short-term extreme and then hopefully a few other of my favorite indicators to fall in line so I can take a position. Currently, there is nothing out there that suits my fancy. Had we moved higher to close the 8/11 gap today I would have taken a position and if we do happen to reach that level this week I will most likely take a position so stay tuned. Subscribers, be on the lookout for a real-time trade alert and a tweet. Both should come directly to your email and cell phone.

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Kindest,

Andy