Scott Redler: Is This Late January All Over Again?

What does the present day have in common with late January? Let's see.

Both times, we went below the 8 day first.

Both times, the gap went unfilled, which was a sign of weakness.

The market usually moves in the direction of the unfilled gap -- to the downside in this case. That means you have sellers in control.

My process puts me in Tactical Mode when the 8/21 break since those are my momentum moving averages. Remember, to see the 50/100/200 day, the 8/21 day have to break first.

Tactical Mode means I start taking profits and cleaning up 'loose longs.'

This morning, I closed out/was stopped out of my longs in names like AMZN, AMD, GOOGL, and FB. That's not what I wanted for today, but taking paper cuts is part of the game. It's not fun, but it's better than gushers, which is why I respect my stos. 

But remember, panic doesn't pay. So let's get our levels mapped out.

For a real correction, we need to stay below all moving averages. 

For now, if we stay below SPX 2819, there could be a trip to support around 2796. 

The 50 day is underneath at 2789.

I'm not calling for a correction or crash -- I'm just keeping my options open.