At this point, I think short-term rallies will continue to get sold into because the market is likely to continue seeing a lot of negativity, but we also have to worry about the jobs number. 

The S&P 500 has gone back and forth during the trading session on Tuesday to show signs of weakness yet again. In fact, the market has broken down below the 4000 level, which of course is a very negative turn of events. We are well below the 50-Day EMA, and now it looks as if we are ready to go much lower.

At this point, I think short-term rallies will continue to get sold into because the market is likely to continue seeing a lot of negativity, but we also have to worry about the jobs number. Because of this, I think we have a situation where it might be quiet for a day or 2, but by the time we get through the jobs number, we could have a certain amount of information that people will start to continue to trade the market to the downside. The market is likely to continue to see a lot of concerns about the economy, and of course, the fact that the market is more likely than not going to continue to struggle with the idea of going higher in this environment.
 

Look for Opportunities to Short the Market

• Keep in mind that the Federal Reserve is going to tighten interest rates, so unless of course the employment number absolutely tanks, there’s no reason to think that the market will look at anything other than the Federal Reserve and its tightening policy.
• If that’s going to be the case, I just don’t see how you can get bullish anytime soon. After all, the market continues to see a lot of noise and concern.
• I look at rallies as opportunities to short the market, as we are most certainly in a major downtrend.

Wall Street does have a long history of finding one reason or another to start buying again, but that will be short-term noise more than anything else. Because of this, think it’s probably only a matter of time before we reach the levels that we hit several months ago. Rallies continue to get sold into, and it’s not until we break above the 4300 level that we go much higher. At that point, this would be a complete turnaround, and kick off the next bullish run higher, something that I don’t expect to see quite yet.

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