This market seems very top heavy right now with a nice divergence at the top. We have discussed divergences before and they do not always show direct reversals of the market. However, there is a better than and 80% probability that you will get a reversal, so it is always wise to play the odds.
Our proprietary indicators gave us the edge for this very large down day. The Doji showed the bounce on Friday before the Labor Day Holiday. This video will show you what has happened and what is likely to happen after the holiday. There is about a 70% probability that the market will retrace at least half of the Friday gain.
Using a longer time frame such as a daily chart will often help those of you who like to day trade the indexes. Be sure to review something like Bloomberg.com for another data input. We always look at the Globex from Asia and Europe to help us get a feel for the days market trend. Also make sure you review the Market Reports for the day as well. You do not want to be trading ahead of a major announcement.
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