For the last three weeks the market has been trying to climb trough the resistance layer between 870-920. News flow was quite negative during the time however almost all the gap-downs were bought on the same day. I see this action as a distribution because there has been a lot of buying power wasted to maintain the course. One of these days which can be tomorrow, I expect the market gap down and the gap may not get filled.
As you remember I opened a long position in DUG @ 28.35 last week and the position is still open because I believe we have just entered the downtrend in this sector. I am expecting the other sectors to join to the energy as the selloff becomes broad. My measured target for DUG is around 50 over the next two weeks.
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