[NDX.X] and [DJIA] market update

There is no doubt that markets are weakening but I've seen this nervous energy bleed shorts before.  First one index is moving up and then it slows down.  Then another moves up, again screwing the shorts while the first one pauses and retraces.  In order to avoid getting bled out I think we have to take the strongest index and see where their support and resistance trend lines are and then down do anything in opposition to the leadership index until it either fails to break the next resistance OR it loses the last support.  You won't likely catch the very of UVXY like that but you will avoid getting bled out. 

So look at the DJIA today.  Down 44 and with really crappy internals.  You would think that with something like this UVXY would at least be flat to up.  But no, it's down 4%.




The reason is that $COMPX and $NDX (Nasdaq 100) were both up 18-20 points each.  It is clearly possible that we are just tracing out 5 of 3 of 5 here.  Again the HT was 4 and after that we expected 5 waves up.  You can see the mid channel support line held.  It is clearly possible that this 3rd wave will go up more, pull back to kiss the orange line from above and then  continue on up to the top rail.  So I would not open new shorts until that line breaks down OR the top rail is broken out of and then the channel is broken back down into.  Don't get bled.