I have published tonight's update and have emailed it out to everyone on the ShepWave email list.  Our main goal at ShepWave is to help traders/investors be more educated and disciplined in trading. 

Two weeks ago we had an outside down week.  This signal occured in the Dow Industrials and the S&P 500 indexes.  This signal is usually a very reliable signal.  Last week we had the signal negated by a higher high in both the Dow and the S&P.  So.. Now What?  Tonight's update shows some potential patterns and expected direction for the markets.  Also, I show very precise entry for a new short term QQQQ position.  I am very hesitant to enter any short term positions on the site.  Please use extreme discipline and caution in entering any positions.  We 'could' very possibly be triggered in to a new position in the QQQQ Tuesday.  The longer term charts are showing clear reason to be cautious.

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 The weekly chart of the S&P 500 index above can be used as a proxy for the Dow Industrials index.  Notice two weeks ago we had a 'sell signal' using the 'outside down' weekly sell signal which has always been accurate for in the past.  So.. what to think about the signal being negated?  Key market tops or bottoms commonly issue several signals which are negated.  So. caution is suggested in any long side positions.  Ideally, we get a new recent high in the S&P 500 index very soon (Tuesday would be nice) and a new all time high for the Dow Industrials index.  This needs to be followed by a sell off taking the indexes to close below the low of last week.  Again, I stress 'Ideally'.  So.. it probably won't happen.  Not yet anyway.

If looking for a cautious Short Side entry wait for a sell signal using daily charts.  It doesn't have to be an 'outside down' signal but rather a double break of the recent up trend with the second breaking bar going below the  low of the first breaking bar. We will be keeping our eye open for any such opportunity.

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 The daily chart of the Dow Industrials index can be used as a proxy for the S&P 500 index.  Notice we have fairly clear bearish divergence. (higher highs made on weaker strength).  This is the first signal we look for to enter any 'cautious' short side positions.  The next technical occurence we are looking for is a double break of the recent up trend as shown in the chart above. 

The shorter term charts including 30 and 60 minute charts are showing bearish divergence.   Aggressive traders can use shorter time frames than the daily charts to look for a good entry.  Just keep stops a bit tighter until we get a confirmed signal on daily charts.

So the bottom line is:   The usual strong sell signal from two weeks ago has been negated. So, the rally is still in play.  We see very definitive evidence to be cautious in any and all LONG SIDE positions.  But, until we see a confirmed sell signal ideally on daily charts extreme caution is reccommended in all positions.

|Charts Removed|

 The 10 minute chart of the QQQQ shows the entry areas we gave Monday for new positions in the QQQQ.  Notice we never had a triggered entry for either a LONG SIDE or SHORT SIDE position.  After reviewing the longer term charts ShepWave will NOT be entering a LONG SIDE position.  Just too risky in my opinion.  Aggressive traders can still use the entry signal shown in the chart above to go LONG the QQQQ just be cautious.

ShepWave exited our recent SHORT SIDE QQQQ Position this morning with a small profit.  We made over 5% profit in the short term QQQQ Trades we covered in the site over the past month.  This is a very achievable goal for any educated disciplined trader.  We usually show short term trade set ups in our update.  Unfortunately, we do not show the follow through for the trade.  We try to teach discipline and methods to use to lock in profits.  We can only hope they are used.

With that being said, due to the longer term bearish divergence possibly being confirmed by short term charts ShepWave will NOT be entering any aggressive LONG SIDE trades. (Not yet anyway).  We will use the 10 minute chart shown above for a potential short to mid term SHORT side trade.  So, a break below $43.96 would trigger us in SHORT. Cautious traders can wait for a double break of $43.96 with the second breaking bar (10 minute charts should be fine) going below the low of the first breaking bar. 

Our initial Stop/Loss will be set to $44.10. 

That is all for today.  I will update Tuesday if necessary.  If we enter any trades on Tuesday, which we should, please check Shep's Trading Log for entry and any adjusted stop/loss areas.

Shep