In order to answer this correctly, one should first ask themselves, which timeframe are they trading?
If we take a look at the larger degree trend, the direction is down and therefore only short positions should be taken. Short term traders can see that we are trading in a channel and until we can see a decisive break either to the upside or downside, then we must be quick to take what the market has to offer us. And because of the volatility in the markets, this is great for short term traders and we can capitalize on both the bullish and bearish plays.
For the near term outlook though, as long as we can stay above 12155 and more critically 12069, then upside targets are 12707 – 12960. We do need to get back above 12756 in order to head higher.
There is also a “Time Cycle” for March 7th – 14th which could come into the picture. If we are heading higher into this timeframe and reach the price targets then it may indicate that the next leg which could carry the Dow Jones lower is about to begin.
One major concern is that we are back below the 20 day moving average with another sell signal on the momentum indicator. If the current position in the market does not lead to a rally then we could be just days away from another sell off.
These are tricky times if you are trying to stay in for the long term plays so at best either wait for a break out or be quick and nimble.
Sandy Jadeja is Chief Market Strategist for ODL Markets and founder of www.Spreadbettingtowin.com where he teaches low risk trading strategies and money management.