SCT Issue #256
Don’t be fooled by yesterday’s stock market rally. Yes, the bounce has been bigger and stronger than I expected, a testament though to the long-term bull market that is still in force.
But short-term, not one of my system models for the stock market has issued a buy and everything remains intact for another steep swoon.
Technically, on a chart basis, the S&P 500 – and similarly for the Dow Industrials – has merely bounced back to major overhead resistance, which you can see on this chart here.
Notice the band of resistance marked by the channel defined by the black lines.
Also note the declining upper median line, which should hold as resistance. If it doesn’t for whatever reason, maximum resistance to any move higher should be contained by the bottom of that upper channel.
Hold your bearish and volatility plays on the stock market, ProShares UltraShort Dow30 (DXD) with a good-till-cancelled protective sell stop at $22.39 …
As well as your shares in iPath S&P 500 VIX Short Term Futures ETN (VXX) with a protective sell stop, good-till-cancelled at $23.72.
NOTE: If you do not own the above positions for whatever reason, you may purchase 100 shares of DXD and 50 shares of VXX, at the market now, for every $25,000 you have allocated to this trading service. Use the aforementioned protective sell stops on a good-till-cancelled basis.
Meanwhile, gold is holding support levels, and should soon begin a decent rally. Hold your shares in VelocityShares 3X Long Gold ETN (UGLD), with a protective sell stop, good-till-cancelled at $8.22.
If not on board UGLD, purchase 100 shares now, for each $25,000 you are trading, at the market and use the aforementioned protective sell stop, on a good-till-cancelled basis.
Also hold your shares in United States Natural Gas Fund (UNG) with a protective sell stop, good-till-cancelled at $11.64.
If you do not yet own UNG, please wait for my next signals in natural gas.
Stay tuned, lots more action coming soon.
Best wishes,
Larry
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