Take No Prisoners Policy

I haven’t been around much in the past week but just from looking at the hourly charts it’s rather obvious that this correction has hurt as many bears as it has damaged the bulls. The general script has been a gap down followed by a slow melt up higher throughout the session. Whoever has been driving those daily gyrations (i.e. institutionals) has been abiding by a strict take-no-prisoners policy. I bet you good money that few retail bears are able to hold through those pull backs. Which is the sad fate of retail bears – they wait months and sometimes years for their coveted pull back, just to miss out on most of the good moves in the end. Downside corrections can be some of the most lucrative tape as things usually move fast – however there are times when we get tape like this which chops everyone into pieces. Unless you shorted at the top and held your positions until now you probably wavered and took profits sometime last week. I can’t really blame you as this is pretty tough tape to negotiate. Especially without the assistance of the evil Mole! 😉

Here’s the SPX which touched its lower 100-hour BB on the gap down this morning. On the daily panel we got a touch of the 25-day SMA and we’re currently painting some sort of hammer. Normally not a long entry unless we’re in an uptrend but I may be tempted if we drive higher tomorrow:

On the hourly here’s what I have in mind – an RTV-L on a breach of the prior candle at 1687.13 – stop below the 1682.23 low. This candle just concluded and you have an hour to find an entry.

Excellent setups today – please step into my lair:

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Cheers,