Tuesday, September 28, 2010

Why did I sell 1 unit of SPX?

SPS (RIFIN) 60 min chart:

Love or hate, there is no improvement without financials. I am constantly monitoring SPS (similar to RIFIN), as it gives us help to determine whether a given rally is sustainable or not. SPS is in decline since 21-SEP-2010 14:30 and the most recent bull cycle on 60 min chart could only support 195, but there was no improvement. When AD sentiment falls under 50 it means high probability of bearish cycle. As you can see yesterday oscillator turned to negative, buy volume fell, sell volume rose, momentum turned negative and histo had a bearish cross. Correction of SPS is under way can drag market down and wipe our nice gain on the second unit.. I did not take that risk, rather I sold that unit and now I am waiting till SPS is well above current resistance and reaches 200. When SPX tests that level and RUA gives still confirmed bull, I'll buy back our 2nd unit of SPX.

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