While we had a fabulous intraday trade into about 2 pm EST on all the indexes, the market then sold off for the last two hours, rejecting prices right at the downtrend line on the daily chart, at least for our core, S&P 500 Index. From a swing trading perspective, that does not yet trigger a new buy.

If you magnify the upper Algo labels in the chart above, you will see that the Algo places the “Wave State” in the “Kill Zone.” Naturally, I program the circumstances that elicit the label – and they are not circumstances to go long for a few days or weeks quite yet. Also, there are still lots of red and yellow on the status labels, as opposed to green. The labels are purposefully color-coded. Again this is less than ideal.

There is a faint tail visible on today’s candle above, handily rejecting a down trendline break. Volume was light and lower than yesterday on this up day – so no follow-through yet either. But you know the saying “if at first you don’t succeed…”  

Tomorrow is a new day – let’s see if the market can take another shot at breaking the downtrend. The NASDAQ 100 is in the same boat, essentially. Both the Dow and Russell 2000 rejected new highs as well by the end of the day.

I am sticking to day trading for now – no Navigator swing buys as yet.

A.F. Thornton