October 29, 2018

Is It Time To “Sell the Rip”?

In last Friday’s video, I described several support levels to watch for if there was continued weakness.

In a way, one can argue that today’s action is worse than the run-of-the-mill decline because it happened on a day that had a VERY strong open.  The Dow was +300 at one point this morning…and then suffered a huge -526 point decline from that early high. The S&P 500 traded back above 2700.00, a large gain from Friday’s close, but couldn’t hold its gains either.

As I type this, the S&P 500 has not traded below Friday’s low price; however, there is a support level above that in the 2640.00 zone.  If this level is broken (and it looks weak enough that it just may happen) then new daily lows should be on the horizon – absent a special comment from the Fed Chairman or the president.

When the market goes from BUYING any gap-open lower, to SELLING a gap-open higher, I would say that a major change has happened.  

“Buy the Dip” has morphed into “Sell the Rip.”

about the author:

Dan O'Brien

Dan O’Brien has had a long, experienced career as a trader, a broker and an educator. He has a tremendous track record calling trading signals in the S&P 500 and major stock names. Dan has developed all the tools with his over 20+ years of experience in the business - top-notch technical acumen, an in-depth understanding of market fundamentals, a disciplined approach to trading and a patient style of teaching.

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