Today the FED announces their interest rate decision. It also happens to be the last day of the month. Statistically today is a bullish day. Personally I am severely struggling to fight the urge to sell short the market right now. I had a short position on going into yesterday morning in the European indices, but after trading sideways for an hour I got stopped out for a handful of points. That was not a bad idea as the market rallied strongly in Europe. The next trade was to go long FTSE and short the DAX for an alignment trade. This was closed this morning when the FTSE opened up due to the 5% rally in oil and the DAX opening down(rather lucky than clever, right?).
So here we are. I think we are ripe for a correction, and I will be watching the market like a hawk tonight. I actually think the market yesterday pointed to higher prices today, so I am not doing anythin now, just sitting on the sideline, waiting.
The levels I will be shorting at will approximately be as follows
Dow: a move below 12,450 is signs a breaking down. A move above 12,550 is bullish in the near term and could set up a little more strength into the first days of February. Patience is required. It looks like we are distributing shares here with the Dow trading sideways for 45 days.
FTSE: a clear sell signal comes with a break below 6135. We are going nowhere at the moment and I am just sitting waiting. The current price of 6235 is smack in the middle of the range.
DAX: The dax has been the strongest index so far of the ones I trade. A move below 6730 will mean the rally of yesterday was a fake, and I will short this index immediately.
I have included a monthly chart of the OEX below as well as a fresh weekly review with the main levels displayed...
ANALYSIS
