Terrible Tuesday

Well Tuesday was definitely not kind to the bulls. But like I said in Monday's post, if we could not get above the pivot then we would have every reason in the world to selloff. And boy did we. After gapping down in the premarket the ES futures came back up to just about almost fill that gap and hit the pivot point of 866.50 to the tick. That was the high of the day and the trade of the day. Selling the pivot.

The remainder of the day saw several good setups to take on the short side ambush trades. Flag after flag setup preceeded to breakdown and make new lows. We ended up hitting the 820 level and some shorts covered into the close.

Going into Wednesday I have a short bias but think we could see a snapback rally at least in the morning session. A day with selling as overextended as Tuesday sometimes bounces back like a rubber band and suckers in some new longs who go "shopping for cheap stocks".

The pivot for Wednesday is 836.75. We are trading 829 currently and I would be a seller of any rally into that pivot. There are a few short ambush 50% retrace trades out there. One around 830 or so and the other up at 841. If we do get over that pivot beware of that 841 zone that could see selling pressure. That short trade has a target of 809.50. Trade safe.