Special Monday Update


The bearish backdrop that has been hanging all over this market since the Christmas lows has finally asserted itself and with a vengeance. It won't take many more days like this (DOW down 700 points as I write this) for a slew of intermediate term Sell Signals to flood the trading system. As we have learned painfully in the past, jumping on the bandwagon prematurely is not worth the risk; let the patterns unfold as they are supposed to for lower-risk high reward trades. A perfect example is GBTC, where the speculative entry was under $5, while the first system Buy was at $6.50 just two weeks ago. Today GBTC has traded as high as $10.45. That's about a 65% gain in 10 trading days and GBTC isn't even an option.

In the shorter-term oriented Premium service we bought FXI puts last week, while buying QQQ puts and VXX calls today. Those are shorter term trades, but are also often a precursor for longer term trends. We may be on the cusp of one right now, with dozens of opportunistic intermediate term trades directly ahead as a new downtrend unfolds. 

It's a marathon, not a sprint. Please review the QQQ chart from the Weekend Update to see just how far down this market could go and how it's still very early in the descent. I'll be back in Arizona tomorrow (Tuesday) refreshed and refueled for summer laps around the financial markets.