Contributor Since 2008
I find it worth noting that both the Dow and the Nasdaq have bounced off of key support levels this morning that I had previously drawn on my charts. Using that knowledge in the context of my timing signal, it’s not safe to buy the dip as I would wait to see if this bounce can materialize and last longer than 1 day. Right now the test of previous lows has succeeded, but that’s not to say by the end of the day the market’s selling couldn’t accelerate.
I was right to trust my instincts and not buy my most recent timing signal as it saved me a very painful trading day. We also could be witness a key psychological reversal take place. Before when my signal would issue a sell signal it would fail as the dip buyers would push the market higher and all buy signals were meet with a flood of buy orders. This is significantly different behaviour when traders are unwilling to buy stocks when a long signal occurs.
Logic tells me we’re going to see the March lows before the May highs.