Market breaking down??

As of right now the market is oversold on both the short term and the intermediate term. At this moment it is breaking down out of its bearish rising wedge, this favors lower prices ahead. Short positions should have been entered when we received the market top indication, now long positions should be sold and new positions shorted on further strength. Watch for support around 800-750.

Update

Market is nearing a point that looks good for some short entries. I would go with some conservative shorts that are at decent resistance levels with tight stops at this point. The market is looking VERY toppy. However, we have yet to break down from the rising wedge, once that happens I would be loading up on shorts.

Trading System

Sorry for not posting for so long, I have been working on perfecting my trading system and I think I am finished now.

The system is comprised of multiple indicators spanning across multiple time frames. It has intermediate term top/bottom indicators, intermediate term momentum indicators, long term trend indicators, and short term entry point indicators. It takes a certain amount of subjective thinking, however it is a pretty mechanical system and is fairly easy to use once learned.

here is what to look for:

1. Has a top or bottom been spotted by the top/bottom indicators (if so a trend change is imminent)

2. Say that a top has been spotted. You would tighten up stops on your long positions and enter a few short positions (basically go market neutral)

3. Next you should look for a confirming signal from the intermediate term momentum indicators. This confirms the new change in trend and you can then enter positions in that direction.

4. The short term entry signals can be used to find good entry points in the direction of an intermediate term trend.

5. New positions can be opened in the direction of the new trend until a new top/bottom has been spotted, once this happens you repeat the process (stops are tightened up on existing positions and a few new positions are opened against the trend to move market neutral)


Here are what the indicators are saying right now:

Top/Bottom Watch: Topped

Intermediate Momentum: Bullish

Short term timer: Neutral, oversold, however, bearish rising wedge and lots of negative divergence is in place (no more long positions should be taken, as seen below)



Updates should be posted nightly from now on. Enjoy!