General Ground Rules for Swing Trading This Market

01/19/2016 6:00 am EST

Focus: STRATEGIES

Gary Tanashian, of BiiWii.com, shares a segment from NFTRH examining the US market from several different technical, leadership, market indicator, and sentiment angles and points out that he thinks if the bulls have something up their sleeve, they'd better pull it out and throw it on the table right now.

The following is the opening, introductory segment from this week's edition of Notes From the Rabbit Hole. After setting these general ground rules for swing trading this market, NFTRH 378 clearly illustrated the US market from several different technical, leadership, market indicator, and sentiment angles. We also thoroughly updated global markets, currencies, and explicitly broke down the gold sector to be clear on what will be in place technically, sector-fundamentally, and macro-fundamentally when a real bottom is achieved for this counter-cyclical sector.

We began 2015 managing declining market momentum, continued into the summer as the S&P 500 went sideways with a downward bias as momentum eased further, nailed the downs and ups of the August-September bottoming process, projected a big relief spike upward based on unstainable bearish sentiment (at key support), projected a return to bearishness (although a grind at worst, into year-end) and here we are in early 2016, when a resumed bear phase was likely.

What I had hoped for has come about. The stock market's intermediate-trend changed when—using the S&P 500 (SPX) as an example—the key short-term support at 2000 was lost. I had thought the market might try to bounce there but the impulsiveness of this bearish surge cracked it right down to an even more important support level. That is the October 2014/August 2015 lows that we have often noted.

The market is in an intermediate bearish trend but a bear market for the S&P 500 would only be indicated with a failure here. We are already in a stealth bear market by other lesser watched indexes. But the venerable S&P (and Dow and NDX) are still clinging to key big picture support. If the bulls have something up their sleeve they'd better pull it out and throw it on the table right now.

Regardless, we are now in a market swing regimen within a bear trend. Amen to that. To read the entire article click here…

By Gary Tanashian of BiiWii.com

Related Articles on STRATEGIES