That's what CNBC calls this sell-off and rightly so.
We have two high-probability short-term trades on the Daily Charts per previous Comments and Instablogs:
<< Dow Jones Aggressive EWA: http://g10.picoodle.com/ltd/img10/5/5/23/aarc/f_141u_d96_ubk5c.png
<< SnP500 Conservative EWA: http://g10.picoodle.com/ltd/img10/5/5/21/aarc/f_141u_78a_ubk5c.png
And they are now in Pullback Mode:
>> Dow Jones Aggressive EWA: http://img15.imagefra.me/i566/aarc/141u_392_ubk5c.png
>> SnP500 Conservative EWA: http://img10.imagefra.me/i566/aarc/141u_1cd_ubk5c.png
As in always, a hard break of the 50ma Support is considered bearish and majority of traders will wait for SnP500 and/or Dow Jones to make a touch down to the 200ma Support to initiate longer-term trades. For Day-Traders; a test of the 50ma support is what they have been waiting for to initiate short-term Trend Trade.
The super-duper trade I made for the SSO recently proved to be a losing trade as the markets kept plunging down yesterday and today:
<< SSO Failed EWA: http://g10.picoodle.com/ltd/img10/5/6/3/aarc/f_141u_17b_ubk5c.png
Actually, it was a correct analysis/trade in that IF the v-th wave down goes more than 1.62x of the I-st wave then SSO can result in a Spiral Meltdown. But a losing trade non-the-less with controlled stop loss.
* Can't win them all. Traditional trading objective is to improve trade success rate to 60-70% and/or improve reward to risk ratio to 3:1. With intraday entries and/or exits the success rate can suffer considerably due to multiple whipsaws but the reward to risk ratio goes way better than 3:1 with tightly controlled hard stop loss provisions.
Right now the better trade is either buy the 50ma test (for Day-Traders) or wait for the Jobs Report.
- If SnP500 gaps up tomorrow then it becomes another Trend Trade that may or may not result in new highs in the days and weeks ahead.
- For the Swing Traders; the better course of action is wait for SnP500 to test either the Daily 200ma Support; or the Weekly 20ema Support (SnP500 is trending on the weekly and thus the 20ema is a potential Holy Grail Trade; or wait for SnP500 to test the Monthly Chart Breakout Support of 1576.
** I started buying SSO again today (as a Day-Trade) using the 15min Divergence Buy Signal with today's low as the hard stop loss to minimize potential losses. Will add some more if a rally happens tomorrow.
>> SnP500 Intraday EWA + TA: http://img10.imagefra.me/i566/aarc/141u_a5b_ubk5c.png
Objective is to sell half on a A-B-C intraday rally (b-wave on Daily Chart) then hold on the other half just-in-case SnP500 fails to produce a lower low on the Daily Chart.