It’s a Bear.
Heavy selling under the major moving averages on the major indexes is clear as a bell.
Everything but Energy is on the decline.
For Dow Theorists, a breakdown of the Transportation Index is a major Red Flag.
But it’s only the first week of the New Year.
January is often a voaltile month. And where January goes, the market tends to follow for the year.
Smart money has stayed out of the market for the intermediate-term. Both Bulls and Bears have been burned over the past couple months.
Our strategy plays off whatever the market tells us to do.
Shorting is a tricky maneuver. Though down is the likely direction for the short-term, we need to be aware that short covering rallies are fierce.
William O’Neil’s shorting strategies come into play after former market leaders have put in a few down legs and the indexes are unarguably trending lower.
We’re not seeing many of those setups right now.
And with the S&P 500 facing key support at around 1,400 we need to be careful.
As a traders we need to act like wild cats in the jungle. We should only jump for our prey when we’re certain we’ll get it.
There’s a full year ahead, and plenty of opportunities await.