Wheeee, this is fun!
As you can see from our Big Chart, we flopped right back to support lines on the Dow (13,200) and the Nasdaq (3,075) with AAPL dragging the Nasdaq down for a change, all the way to 3,067 but our dollar-adjusted support (at 82.50) was 3,060 so still strong despite the sell-off.
Our other watch levels are Dow 13,464, S&P 1,428, NYSE 8,160 and Russell 816 and the NYSE and the Russell were both over our lines yesterday – morning – briefly – before crashing back down to Earth.
Of course we were EXTREMELY skeptical of the morning rally, something I noted in the morning post as well as my 9:31 chat note, where I urged Members not to let themselves get scared out of position by a currency-driven rally, saying:
Step one before capitulating is getting yourself neutral with the aggressive longs – then you can decide what to cash out and what to press without panicking. Often we have blow-off spikes at the tops and bottoms and this sure feels like one but we'll have to respect our levels if they break over – although I'm tempted to adjust again for this BS 0.5% drop in the Dollar but, so far – we still haven't had one whole day of even holding 3 of 5.
We followed up in Member Chat at 9:57 with aggressively bearish adjustments to our $25,000 Portfolio, which had been up to almost $40,000 on Friday but dropped back to just under $34,000 into the morning rally as we were poised about 70/30 bearish in our short-term positions. Although we did look at another 3 bullish plays that can make us 300% in the morning post – we were not moved to add any of them on that ridiculous morning pump job and we instead took the opportunity to press those bear bets.
While we may be forced to capitulate if our levels do get broken and hold – the good news is those capitulation points are now so close that it will be a small loss to take if we do have to flip bullish. Also, looking at our index charts priced in Euros gives us some very different views of resistance indicating BIG TROUBLE for our markets if the Euro weakens and the Dollar rebounds: