This market continues to have issues traversing our updated Range Rover line of topside resistance (we changed that line to 1041 on our last monthly strategy call – it’s the dotted red one in the chart below).
All together, while it’s paid to ride the rocket of the Pain Trade higher (buying dips) for the last few weeks, this week a new strategy is emerging as potentially profitable – selling the rips!
I don’t have to be bullish or bearish. At this stage of the game we are seeing outside reversals – breaking out to new highs versus the prior closing high, then reversing intraday to a lower closing high – and, on the margin, outside reversals are more bearish than bullish.
I have immediate term TRADE support at the 1009 line (dotted green). If that line breaks, watch-out below (TREND line support = 940). If 1009 holds, and the US Dollar puts in another lower-high, buy the dip.
This isn’t trading. This is risk management.
Keith R. McCullough
Chief Executive Officer