The March low in the Dow cash was 11,555. With the failure of support at 12,055, and the move below 12,000, sell stops have been touched off. I wrote last week that if the market did fall apart, we’d get short on a sell stop. I had had a small winning long position on last week.
Using good risk/reward parameters, that became a net profit on 1/3 and a push on the rest. The most I risked on the last 1/3 of the position was just under 160pts.
The old adage sell in May and go away has rewarded bears again. Is this the start of the end of the world? I have no idea. I certainly hope not. 11,800 should provide some support. Failing there, we could run down to our March low at 11,555.
I am currently short, with a buy target at 11,575.
That is all.
CER