In the video below, we look at the Dow.
It is very important that the 8200 level hold.
In a bear market, you don’t need any news, the market just falls on its own. In a bull market, you constantly need news to push the market higher.
The MACD on the Dow is negative and the moving average lines are falling as well.
A mini-head and shoulders top has formed on the Dow with the neckline being closed by yesterdays 8099 low.
Before you watch the video, take a look at this chart where I have identified the “slip zone”. As guerilla stock traders we make 80% of our money in this slip zone.
It is a fools game to try and time bottom reversals or top reversals. Always seek to make money in this middle slip zone and exit the market at the first sign that the slip zone has ended such as a sideways market or chart patterns such as a head and shoulders.
We are currently on the sidelines in this market with the rest of the smart money crowd.
In the video I also look at the Fibonacci retracement levels on the Dow. If the 8200 level is broken on the Dow in the next few days then we are looking at a retracement to 7951.99 – 7670.06 as the first support zone.
Don’t go short this market, don’t go long this market. Sit on the sidelines. Knowing WHEN to invest is just as important as knowing WHAT to invest in. Amateur traders over trade their accounts and hardly ever go to the sidelines wait for a dominant group (bulls or bears) to win the battle before placing their bets with that side.
I hope this video helps you make a lot of money or in this case prevents you from losing a lot of money. Leave any comments you might have below. Thank you and happy improved trading.
Lance Jepsen
President, GuerillaStockTrading.com
Your Trading Coach
(because everyone, even Tiger Woods, needs a coach)
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