Tuesday was without a doubt a bearish day. However, it is not yet enough to call for a reversal from the bullish trend we’ve been experiencing, it’s still too early to call for that. Right now, you can still look at this as a healthy pullback, perhaps back into the range the market had been stuck in for quiet some time leading up to this breakout.
Remember, we still have a catalyst event on the horizon that could come into play when looking at either the chance of default, which is unlikely, but also the chance Congress gets a deal done this week or next. Either way, this will surely have an impact on the market one way or another.
As of right now, however, support or bounce levels are what we are keeping an eye out for when looking for new trades as the market looks like it wants to continue to pullback. Until we have signs of a full on bearish reversal or continuation of the bull rally, you’ll want to exercise caution this week going into next. A important thing to keep in mind as traders, it isn’t just our job to make money, but keep it as well. If you don’t see anything, live to trade another day.
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Good Luck With Your Trading!
Christian Tharp, CMT
