The steady decline can really test your resolve if your a bull. It has also now made it more difficult to find shorts that are up against resistance as they have sold off. Here a few important rules to keep in mind manage your bias when a market corrects after a strong move and the burning question in most traders mind is, "has the market topped out or is it flagging"?
1. After a few days of decline be careful not to short into daily support. I pulled BA off the list after two good down days becase of the daily support at the 200 MA. Sell OR reversals against R1 and below daily resistance points. You can sell down if an inflection point is being broken (JPM through yesterday's low is an example of a major inflection.
2. For longs focus on strong daily trends. Adhere to the basic rule that positively stacked pivot patterns are better for OR reversals than negatively stacked. If negatively stacked, you want it to clear the FTP before you go long.
3. If you want a bigger picture rule to determine when the flag has turned up, wait for the markets and or/your stock to clear the 3 day pivot high. If the condition of the market is one of a confirmed bearish 3-day pivot condition then wait for a close above the 3-day pivot high. We currently have a confirmed bearish 3-pivot condition in the market watch because the markets closed below the pivot low and then had an OR breakdown below the low of the day that closed below the pivot low)
The focus list are long. To shorten it you can limit yourself to the top of the list if you like.
~Long Focus~
CF
LULU
CELG
POT
VMW
WYNN
IBM
BBBY
ACOM
FCX
~Other Long Charts of Interest~
AMZN
PLCM
NFLX
VHC
BIIB
BWA
LO
AAPL
KLAC
SBUX
YUM
CRM
DECK
PTEN
TGT
NTES
~Short Focus~
DE
WHR
MHS
GS
JPM
~Other Short Charts Of Interest~
SNDK
VECO
SNDK
BA
SINA
SOHU
MOS
SMG
