Can't Wait for Wednesday

I received a funny email today. You get them all the time, too. Sales pitches from "gurus". This one was titled "Is the Market Rally Over?" I turned to Steve and laughed out loud.

Of course the rally was over--last week. Before the market opened Friday, Steve indicated as much in the Commentary. After Monday's triple-digit loss, we saw another 100 point drop in the Dow today. The NASDAQ was off 20 points. Both indexes are down more than 3% since the opening bell Monday morning.

So what's next?

The long-term indicator is still rising. The intermediate indicator is in the upper reversal zone. Both the short-term and momentum lines have been in phase, lock-stepping deep into the lower reversal zone.

The new chart Steve included in the website shows our 3 critical moving averages (5, 30 and 50) along with volume. This should be VERY useful in helping us visualize the written recommendations:

Today the market closed down just below the 30-day moving average. Will the short-term and momentum cycles set up for a nice bounce? I'm looking forward to the market open. It should be a great trading day Wednesday.

New Chart

Steve just added an awesome new chart to the Commentary page.  Check it out.

Steve Calls It

The Dow Jones Industrial Average and the NASDAQ were each down more than 2% on Monday. If you've been following Steve's Market Forecast Commentary, you saw the pullback coming. 

In his Commentary before the market opened Friday morning, Steve wrote, "I'm expecting to see another pullback to the 30 DMA [30 day moving average] in this next short term cycle decline. That is likely to develop next week after the short term cycle peaks in the next session or two." 

And following up in Monday's Commentary he said, "Short term cycles were topping out on Friday and will begin rolling over this week...Don't be surprised by a pullback that resembles 6/11."

"Therefore, continue to use stops on intermediate term trades underneath a 21 or 30 day moving average. You can also continue to trade for bearish profits short term by watching the intra-day ETF's using the 8/8 crossover averages which have been very effective in these faster momentum/short term moves."

Hope you weren't on the sidelines during this opportunity. Use the DXD and QID, which are inverse ETFs we use to trade the Dow and NASDAQ, respectively, on down moves. At the close on Monday the DXD was up over 3% from its Thursday closing price. And the QID was up almost 5% from its Thursday close.

Steve put it this way in today's Commentary:  "Cycle analysis is the one tool in our technical arsenal that is designed to measure 'time', and the one tool that lets us predict when turns are coming due."