I'm not currently short -- completely in cash -- just tracking the trend. All technical indicators point downward towards the bottom of the broadening descending wedge
. That long wick bounce off the lower trendline is calming for some bulls who are looking for a potential long entry. However, it's also a major inflection point to a previous double bottom
we explored at the end of January. This this technician, that's a big red flag that a bounce off of that low means we're likely seeing a dead cat bounce to form a cup handle in an upside down cup & handle
. Worse yet, the cup & handle
formation would give us the right shoulder of a major head and shoulders
. If this entire scenario plays out, we're looking at a downside target somewhere in the neighborhood of $355. Before you bear market alarmists ring your bells, the market will still be in a long-term bull trend when and if it pulls back to these levels. Exercise patience and consider utilizing the handle formation to exit long positions you recently setup and are currently holding the bag. Cheers!