By All About Trends
TESTING TESTING TESTING
Not just levels but highly emotional folks nerves too. Not us though as its all about being on an even keel emotionally and trade size risk management which allows us to bend like a willow tree here.
Yesterday we said:
Don’t rule out a back to the scene of the crime to retest those lows to TEST that low. We’ve seen it all too many times around here folks at turning points be it at lows or even highs.
We’re not saying it’s going to happen but we just want you to be aware of the potentiality existing. That way if it were to happen? You’d already known about it vs. freaking out because you had no clue, in other words it’s the unknown that we sometimes fear. We’d rather it be known to you all so you don’t have to fear it IF it were to show up.
Now that you were prepared for this possibility in advance it isn’t so scary knowing this was a possibility of occurring now wasn’t it? Sure beats being a deer in the headlights without a clue if you ask me.
As we post this, not only did we get a retest, but even an undercut (say didn’t we talk about shaking a tree here?) Seriously though, we are pretty oversold here so its really a hard call in the very short term. One thing I want you to notice is that of Positive Relative Strength (RS) Divergence (green circles) that showed up on this undercut. See it? What that means is that there is more stocks under the surface holding here than there are issues following the lower low from a few days ago in the indexes. Its a positive I’ll tell you that.
So when are we going to bounce? No clue and neither does anyone else know either. For us the mode we are in is:
” 90% of this is getting in the zone and 10% is sweating it out while in the zone”
In the meantime, lets see what transpires once the lunch time crowd is done checking accounts.
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