Is The Bounce Over?, A Look At Reopen Value

While the IWM still looks solid technically, Energy (XLE), one of its underlying leaders, stumbled last week down 7.54% and closing below its 21 DMA for the first time since early February. The other leaders of Reopen Value, the Financials (XLF, KBE) and the Industrials (XLI), are still holding up technically.

My short here, therefore, violates my rule of waiting for what appears to me to be “unrepairable” technical damage and shorting the subsequent bounce. I’m doing something that breaks my own rules and I don’t recommend: I’m relying on my gut instinct rather than waiting for price confirmation. However that may be, if I’m correct the last leg underpinning the bull market is being kicked out leaving it with nothing to stand on.

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