ChartSmarter Wednesday Game Plan 9/24/14

Markets remain in skittish mode as the last 3 days for both the Nasdaq and the S&P 500 have closed in the bottom of the daily ranges. The S&P 500 fell .6% and the Nasdaq by .4%. The good news is that both are approaching their respective 50 day SMAs. The bad news is that for the indexes it really has not been a reliable line to count on. The S&P 500 for instance held the line nicely in April and May, but on the occasions it sliced through it were nasty and pretty consistent. On 1/24 and 4/10 it chopped out 2.1% of its value and on 7/31 slipped another 2%. Will the take place once again? Sometimes I like to take a look at the bearish inverse ETF for the S&P 500 and looking for patterns that I always love to do, notice it is on a 3 day winning streak. The ETF has not been on a 4 day streak throughout all of 2014. Will tomorrow be the day? The Nasdaq we have been concerned about with its recent volatility near decade old plus highs and notice that the bearish engulfing pattern on 9/3, just above the round 4600 handle. The high that day was defended with the intraday high Friday, even with the craziness of an options expiration session. Even the old adage “buy on the cannons and sell on the trumpets” could bolster the markets ways Tuesday. Always rely on price alone, but the bears seem to be licking their chops here. That is of course what is left of the practically extinct animal, as bearish advisers are near lows not seen in sometime. Almost like they are embarrassed to be seen, akin to us long time NY Met fans. The bears time is coming.