The market is finally taking a bit of a breather from the morning rip-your-face-off short-covering rally. It just shot up at the open and stalled as predicted. This is often the case with large gaps, followed by late afternoon profit-taking by the daytime crowd.
As to establishing a swing position, I will see how things look right before the close. We may test the top of the gap, also the 21-day line on the RTH data around 4388. That would be a good place to begin establishing a swing position if we get a nice pivot.
For now, I am treating the Navigator Algo signal as a buy signal but still looking to cautiously establish a swing position on pullbacks and at key levels. I am targeting 10% November monthly SPY at-the-money calls if the pivot materializes.
The Navigator Algorithm can give us the signal, but it cannot predict the run. We have to use our other work to help us with targets and determine whether this is merely a run-up to the top of the down-channel or a true trend reversal. The jury is still out on that score.
A.F. Thornton