Wednesday, January 19, 2011

Why Short

The market is ready for a correction:

When the 5 day EMA of the total put/call ratio makes even the slightest turn from overbought, a correction usually follows.

Also the market breadth is weak by some measures.

I had two options: sell on an initial rally or, if it does not happen, sell on a first hourly strong close below the 7 h EMA.

Stop loss is above the recent highs.

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