Weekly Recap: Last week – Premature, This week – Ripe for Correction

Weekly Recap: The warning in my last weekly recap that the bear party is a little premature fully materialized this week when SPY closed 1.84 points higher than last week making a new all time high in the process. But now I think it is finally time for Bears to print the invitations and book the band cause the party is about to start. I see a negative divergence on practically every level starting from the hourly going all the way up to the weekly (see weekly chart below), we could have another small dip and another all time high but another strong up week will come close to voiding the weekly negative divergence and I don’t think this will happen without a major correction so almost sure correction will start this week or at the latest next week.

2013-08-02- Weekly

On Friday I closed the 60 min long position I held with a profit of 0.63 points on SPY and still hold the 120 min long position.

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Battle Plan for the  8/5/2013

2013-08-02-End of day

60 min interval Short under 170.01 on SPY

120 min interval Stop Loss/Short below 169.48 on SPY

* Stop loss lines should be triggered if there is an interval close above them (i.e. 60 min or 120 min ), they are published in the daily blog and updated during trading hours on twitter.

* Take profit lines should be triggered immediately when crossed, they are usually issued during the trading day on twitter.

* Entry signals should be triggered when crossed, but take into account that until there is a confirmation (i.e. close of the interval across the entry signal) , the signal can become a reversal signal.

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