Short Term Trading

[Dimension]

ST Bulls vs. Bears

ST bullish arguments:
-extreme TRIN readings 2 days in a row
-CPC and EPC showing a very large amount of puts being bought friday
-VIX closed outside it's Bollinger band for 2 straight days now and also has deviated significantly from it's 10 and 20ema.
-extremely lopsided breadth two straight days.
-NDX traded below it's lower BB channel for the entire of friday...a very rare occurrence.
-although Friday was horrendous, TICK touched +1000 5 times and never once hit -1000. the 5ema/ma on the intraday chart traded in positive territory for most of the day shortly after the open and even after the late day sell off, rallied back to above zero on the close.

ST bearish arguments:
-the fact that the mkt failed to bounce given similar readings on Thursday suggest bears are in control here.
-mkt continues to make new lows in extreme oversold...reinforcing the bearishness of these move..making new lows in extreme oversold requires conviction behind bears...and this type of damage cannot be reversed easily.
-ideally a 10 ma CPC of about 1.0 and EPC of .80 would be a good area to buy, we currently are at .82 and .68
-given that bears appear to have conviction here, I think it’s best to play bounces with the assumption many will try to short those bounces...