By Mike Paulenoff, MPTrader.com
What is interesting (almost comical) is that after all of the whipsaws, all of the powerful but so far failed rallies, we will go home with our shorts intact on the E-mini S&P and E-Mini Nasdaq and QQQs.
Yes, our entry points could have been a heck of a lot better. But in the end, the fact that the positions remain intact and viable reinforces the idea that the dominant trend is down, which will bail out poorly executed entry points. This certainly was true in the bull market if we bought too early into a pullback or too late into a potent advance. And it is applicable in a bear market as well when we short too early into a recovery rally, or short too late into extreme weakness.
Next week, the indices should resolve this week's sideways action, we believe, to the downside. In the QQQs, we believe in a smash below 34.27 to test critical intermediate term support at 34.00-33.95 Instead of working off its extreme oversold condition by following-through after Wednesday's late-session pivot low, the indices and Qs vacillated in a range, and managed to achieve the same result -- a neutralization of the oversold condition, BUT IN THE ABSENCE OF SIGNIFICANT UPSIDE PRICE PROGRESS.
This type of action should really concern the bulls or the bottom pickers at this point...Have a great weekend everyone!