Special Risk Capital Management LLC

Selling Climax ? January 16, 2016

No bounce this week, at least not much.  The market tried but failed.  The real question is whether we saw a Selling Climax (SC) on Friday. It was a wide range down bar on (relatively) high volume, but the close was more mid bar.  I would like to have seen the Close at the bottom.

Sentiment remains Bearish, but I note that Money Flow has moderated / slowed.  I’m not really seeing panic, so it is doubtful that this is a Selling Climax.  I’m still waiting for a bounce up in price to indicate the strength of the market , a Secondary Test.  Monday could bring new selling at the open and the next price support is much lower, so we’re in an “air pocket” if we continue lower.

I’ve drawn (reverse) trend lines on the chart to give us a handle should a breakout occur.  All we need is continued poor earnings or an international incident and this market will move a lot lower quickly.  Nothing stands out as strong, expect for the shorts.  Be extra careful out there.  Sure would like to see a base built and consolidate before we try to move higher.   ………..  Tom  ………..