By John Pisanchik

The battered trader fell to his knees and cried out to his Lord, ” Lord what do I do?” And behold a voice came to him that said “HEDGE THY SELF!”

Well that’s the strategy at this point. Hedge your longs. The very important 1100 on the S&P Cash Index held as a resistance point this week, and the market weakened. On Thursday and Friday, the market broke through and closed below the 100 day average both days with Friday seeing even lower lows. Since the market is in the vicinity of the 100 day average, we may see some support come in here. Use any market strength to either hedge or close your longs. Here are the short term and intermediate term objectives to the downside. We already broke 1079, the next major support level is 1020. If the market is going to run out of steam to the downside, it could be there. At the very least it may cause the market to have a short term bear market rally. The next major point to the downside is 961, followed by 902, 847, 800 and finally 767. These are all points in the S&P Cash Index. The strategy is to see how the market reacts at each one of these points. If each point is broken to the downside, then the next level mentioned becomes the next objective. As you can see, there is the potential for a butt kicking decline here, so that is why, at the very least you should hedge yourself. Happy Trading.

Filed under: Market Opinions

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