Had you not watched the market, you had been better for it. Nothing really happened. The market is still inside yesterday's candle and we formed a doji today. Right now "ceteris paribus" as the economist would say, the market is gravitating towards 950 and its 200EMA. There may be a pull back or two, but unless support is cracked and the uptrend is broken, the market should follow it's trend. The next strong resistance is 950 and the 200EMA. Now that is a longer-term view. Shorter-term, the resistance is the top of Monday's candle. The support well, is anything below 900.
I was watching the dollar via /DX today. It may have found some support but I still think 83 could be a better support. If it breaks above 85 it would bullish for the dollar and possibly negative for the market.
Another index to watch is $BKX (Bank Index). There is resistance above 37.01 which was Monday's high. If BKX can break above 38, it would be very bullish for the market. I bought some FAZ when $BKX was at 37.00.
So if we are using "ceteris paribus", my play is to start shorting when these events happen:
SPX > 945
VIX < 32
XLF> 12
USD <= 83.40
Till then I will ride my longs JASO and GEOY are doing great. Now if the market deviates from "ceteris paribus" and breaks a trendline or support is broken, then the game plan changes.
And yes that was way to much Latin in one post!
