Every Picture Tells A Story

One final thing! I'll give you what I'm keying on in terms of my road map. Here is a picture of the S&P 500 ETF {SPY} with about 20 minutes to go in the trading day. Each number listed below corresponds to the number and color listed on the chart. 2 & 3. indicate what money flow probability says a break of these various trendlines ought to signify

1. Market is very over sold based on all of the indicators we use across all time frames.

2. Money flow probability indicates that a market that can manage to penetrate this downward trending line @ 2 should either build a base or trend higher.

3. Money flow probability indicates that a market that significantly undercuts line 3 is likely to trend lower.

You can see that the market has attempted several times in the past two weeks to penetrate this line and was rebuffed each time. You can also see that the market is running out of room as it reaches the point where these two lines intersect. So my guess is that there is some resolution here at some point in the next two weeks. In any case we have a different playbook ready for either scenario in terms of how we will tactically approach the markets. Mostly it involves right now waiting out the scenario to see which way the market decides to take us. Being this over sold I would think that stocks should move higher. If that is going to be the case we should have an opportunity to add to client ETF positions on the break of that trendline at 2. We'll just have to see what next week brings.

This is the last expected post for this week. We will at least post once more before Halloween. I don't expect to put this much material up all the time but as I indicated when I restarted this blog, I have a lot to say right now.

*Currently Long SPY and various S&P related ETF's for various client accounts.