Today was somewhat of a pause day as the markets continued to grind out the very weak uptrend they are in. I do think that the market is poised to go down further, probably below the low seen on Monday. To put things in perspective, it has taken two days to recover roughly half of Monday's drop. Typically the market averages have a difficult time maintaining more than two white candles at a time, so I expect tomorrow should probably move lower.
The futures sold off after the Senate vote passed, but I think they would have sold off either way. If you look at my SPY 10-min chart, you will see that the price is moving up into resistance. The red box is the ideal short entry, although I think getting over the 5-day MA (at 117.14 right now) will be extremely difficult. Once up there, this looks like a Gartley sell pattern to me.
The VIX still looks bearish to me until it breaks trend (which it has not yet done).
Another blog I enjoy watching recaps on, www.tradingwithtk.com, recently posted a recommendation to short FINL. I like that play. I also am looking at shorting GCI potentially and LEG (LEG is another TK recommendation). I also am looking to short SPY and may also short IWM and add to gold. I am using the VIX and the SPY chart to determine short entry timing.
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