I made it a point this week to focus upon two metrics to filter out what was expected to be a news driven 5 days of trading. Two days back the ducks were aligning and I noted a window of opportunity open as the Russell closed strongly above a key pivot point. I also mentioned how I was maintaining a stance of caution until the primary breadth trend indicator I follow flipped bullish. Fast forward to today and the results of Fednesday are in and is there much more to say than the market hemorrhaged like an Ebola victim.
The window of opportunity has been slammed shut and any lack of nimbleness the past two days resulted in fingers pinned to the sill. Obviously volatility has kicked up, the indexes have closed below the lower high pivot of 05/29, and the secondary breadth trend I follow has flipped bearish again. I started off the week optimistic of a short term rally having some legs and looks like I'll be ending the week on the sidelines, which is fine. Now that the window is closed it's time to wait patiently for a knock at the door.
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