This three day rally the market has been on has been good, but it may not last.
Let’s face it, any sell-off will have a 3-day rally in it, so the fact that SPX traded higher the three previous trading sessions doesn’t mean much to be completely honest. Yeah, I think it is a solid bounce, and some of the headline risk has subsided for now, but it won’t take much for those same issues that drove the market lower earlier this month to show its ugly face again.
Plus, you now have Germany in the headlines for a possible recession. I can tell you this, that won’t play well with the US markets either. So there are plenty of headline threats out there still, plus the ever looming tweet out of right field from ‘you-know-who’.
So it makes sense to keep this bearish list of trade setups handy, as it is impossible to know when exactly we shall see another market sell-off again, because right now, while the market has been enjoyable the past few days, it has yet to do anything substantial technically, and that keeps us in a situation where a sell-off can come at any moment.
Here’s the watch-list for the bearish short-setups:
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