So I guess it’s time for an update as everybody will be fretting about the red ink on their portfolios and conjuring up images of men waving small pieces of paper over their head chanting “SELL SELL SELL”. No doubt we are in for a raft of “I told you the market was over extended”. In fact somebody was so bold as to point out that the US market was 20% above fair value earlier this week, I’m sure he’s mighty chuffed with himself at the moment, but I wonder if he actually had any money in the market?

So as a result of this cross market Oil/Equity/FX rout what actions do you think I took? None. I observed the charts like any other day, didn’t like what I saw, and just sat on my hands. Everything has already been put in place, there is no sudden requirement to sell, to tighten stops, or start looking for short signals. The thing I love most about corrections is they give me more opportunities to find buy signals.

A Quick look at the S&P reminds us we are in fact in an up trend, and will remain so until further notice. It’s worth observing the divergence between the MACD and price though (I use a stock standard 12,26,9), signaling a softening of the trend several days back. We also have plenty of nearby support at the recent pivots. The previous channel range shows how easily people could decide it was time to get bearish though.

With the US continuing to send out mixed signals as to it’s recovery I’m sure this isn’t the last little sell off we’ll see. Do yourself a favor and ignore the news headlines for a few days when such events happen.

FX Market:
As mentioned, it was a large range day. Since my last blog there really hasn’t been much action for me. Messed up one trade for a -1.0R loss last Thursday as I continue to get my eye in again, apart from that signals have been pretty thin on the ground. The beauty of a big range day is good signals and good strong trends – unfortunately the market was going the wrong way for me though, so it was another day of waiting for better opportunities.

With the break of the long term USD Index trend line we might see some movement allowing for some good trades over the next few weeks though, retracements being prone to rallying sooner or later after all.

Commodities:
No new actions to report, just sitting tight and riding my multi month trend position. The retracement offers a possibility of some signals setting up though.

Results Update:
FX -1.0: R

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