"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 15 hours The $85B Merger That Could Change The Media Forever
  • 16 hours Why Are Governments Creating Their Own Cryptocurrencies?
  • 17 hours How Debt Cycles Impact Gold
  • 18 hours Investors Up the Ante In $1.5B Uber Loan Deal
  • 20 hours Are Gold Miners Poised For A Breakout?
  • 21 hours Is The "Crypto Winter“ Over?
  • 23 hours China Says It Doesn’t Fear Trade War
  • 2 days Twitter CEO: The World Will Have A Single Currency
  • 2 days Asian Currency Correction Could Signal Looming Crisis
  • 2 days Best Buy Drops Telecom Giant Over National Security Threat
  • 2 days The Pros And Cons Of The Federal Interest Rate Hike
  • 2 days Good News For Gold Bulls Despite Interest Rate Hike
  • 2 days Trump Hits China With $50 Billion In Tariffs
  • 2 days Russian Gold Reserves Hit Record High Amid Rising Tensions With West
  • 2 days Stocks Pull Back Following Interest Rate Hike
  • 3 days Will Regulatory Rollbacks Make Banks 'Too Big To Fail?'
  • 3 days Elon Musk’s $2.6 Billion Tesla Challenge
  • 3 days Tech Giants Could Be First Victims Of U.S. Trade War
  • 3 days Dow Gains Despite Fed’s Rate Hike
  • 3 days The Biggest Threat To Chinese Oil Futures
Economists Polarized On Trump’s Tariff Plan

Economists Polarized On Trump’s Tariff Plan

Economists are polarized on Trump’s…

Investors Up the Ante In $1.5B Uber Loan Deal

Investors Up the Ante In $1.5B Uber Loan Deal

Uber may be facing significant…

The State of the Trend

Last week we observed that SPY and SPX are in the middle of a perfect bear flag, and cautioned to keep a close eye on 1140 and 1185, as areas of support and resistance. Both targets were hit, and the break below 1185 suggested that the lower flag line will come into play again.

This week we continue monitoring the bear flag for signs of strength or weakness:

SPX Bear Flag

Given the oversold nature of market internals, and the vicinity of flag support, the expectation once again is for a rebound within a day or two.

Buy Volume versus Percent Bulls

We know that the index will eventually break downward (more likely) or upward from the flag, and that is likely to occur from either oversold or overbought conditions. However, betting consistently on markets becoming even more oversold from already oversold levels is a low odds play, since market crashes don't occur that often. Therefore, keep that possibility in mind but also keep in check the urge to bet the house on it. Position sizing and money management are far more important than guessing what the market is going to do next.

In fact, one of the many unique features of our upcoming app is an original position sizing calculator coupled with a risk/reward indicator.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter