Slow Drip
The Qs continue their
"slow drip" descent as we approach midday,
despite slightly stronger than expected GDP figures, with substantial late-morning
weakness in the
(
$SOX.X |
Quote |
Chart |
News |
PowerRating) exacerbating the current downtrends on multiple
time frames. So where does that leave us? You guess it — oversold, which yes
can become more oversold. Yet at the current run rate, the Qs will be zero in
approximately 30 days, which leaves me largely watching the extreme down move
from the sidelines and looking for chart patterns which might signal reversals.
Why on the short sidelines? Frankly, risk/reward gets really tough down here on
the short side, and I prefer the lesser-risk sidelines until the fog lifts.
Spiking volatility indices, stochastics under my monitor on multiple time frames
and lower Bollinger Band approaches using a wide 2.618 standard deviation all
have me waiting and watching for when lesser trends begin to change. In the
meantime, I’ll step aside and watch the slow bleed. Might I miss some short
profits on the extremes? You bet. Yet I prefer to trade the normal and not the
abnormal and will leave the extreme shorting to the high-wire artists. If you do
choose to short the continuation triggers, I recommend keeping the trades to
scalps with the three-minute 15-MA downtrend support as a trailing stop.
Good Trading and
Have a Great Weekend!