Last night, I posted the chart of the Russell, showing how it had broken it’s 50-Day MA. This was likely a sign that the other indexes would soon follow. Today, The S&P 500 and NASDAQ followed.


Only the Dow is still above its 50-Day MA, but expect it to follow the other indexes lower.

This of course means that the rally which start in March  is over. Expect lower prices from here for some time. Sure, snap back rallies may happen, but those will likely be selling opportunities.

I made a mental note to myself last year. Whenever I saw the S&P 500 close below it’s 50-Day MA, just short it. So that’s what I did with a long position in SH. I may take some heat in this if the market bounces, but it’s a small position; stop at 53.75.

I traded breakouts on the long side all through the 2008 meltdown. Crazy, I know. It wasn’t all bad, there were some good trades in there, but I don’t plan to do it again.  Yes, the market is oversold and many are expecting a bounce. It could happen. I remember writing those things last year while the market continued to get pounded. Oversold can become more oversold. Cash is best for now. The only thing working for me at the moment are day trades in the 3X leveraged ETF’s. I plan to write a trading lesson on this showing the setup I use with entries and exits.

There are almost no stocks that look good here. Any stocks that do look strong will likely be taken down. Just take a look at JADE today. Here are a couple of charts that are interesting. These are at pivot points that could provide a low risk trade, depending on which way they break.

Too many charts are broken now, and will take weeks, maybe months to rebuild.

Good luck and good trading!