Tuesday Update: A Long Way From Long

The almost across the board Short signals in the portfolio are all a long way from their respective reversal Long levels. Interestingly, every one of them has hit its initial stop level. There just isn't a lot we can do, nor is there any special take-aways from the trend-signal system.

On the other hand, pattern recognition is providing evidence of impending  reversals by way of Fibonacci retracement levels. Fibonacci is in itself NOT tradable, but in combination with the dominant trend, it can provide probabilities of an approaching reversal. In the current case, from up to down. 

In the charts below I have provided Fibonacci retracement levels on top of the most recent impulse move down. As price approaches first the 38% retracement level, then the 50% level, and finally the 62% level, reversals become increasing likely. That is if the dominant trend is still operative. When in doubt, the odds always favor the dominant trend is still in force. 


The Dow 240 has climbed to the 50% level of the rally up from  Feb 26th to last Friday. This is a small time frame, but Fibonacci doesn't care. 


SPY exceeded it 62% leve from the January highs, but has since dropped back below it. 


The broadest measure of the stock market, the NYA, retraced exactly 61.8% from the Major Jan 26th top and has been unable to go any higher. Unless and until it does, the trend is clearly down.