Thursday, April 30, 2009

Traveling tomorrow ...

To address samamehta comment from today.

"Many bear blogs are very scared to remain in short because of fear of rally to 900-1000 -- at least a talk. so many have stops at around 880, 890 900 etc. May be bulls will run those stop and then take profit for big the down move."

Closing at 870 is a bit too bullish for me. I too am scared ...

Keep this in mind, we only moved 20 points on the intraday today, on low volume. There was no sell off, there was no punishing the bulls. 2 days ago I had posted the triangle formation

http://2.bp.blogspot.com/_hE3pp93emY0/Sfga5feWFBI/AAAAAAAAAHk/4MW2zLgq9E0/s1600-h/basebuilding.GIF

We still are well within a continuation pattern, we did not even make it back to the breakout range here (circle). 868 was the low of the day.

Remember we talked about the large wedge (wedge of wedges). We failed a reversal and we closed 2 days in a row at 870, the top of the previous wedge - not even intraday test, a close price with intraday tests above that range - that invalidates the wedge.

Our weekly candle last week appeared bearish (like everyone likes to see it) - however, we broke the top of the hangman candle - regardless of where we close tomorrow the hangman candle was invalidated.

All this sounds very bullish and here I am short still with a decent sized position (closed out some after the close). If it were not for travel I would stay short fully but just as you mentioned - I am very very careful at this point. It is acceptable to pay for a great long term position but I have paid way too much in the past few weeks missing some great gains on the long side.

We sold off today, on little volume, on a day where in old times we would have set a mark at -5% yet we closed break even. Yes we have a lot of indecision here, all signs yet again point to a top.

Maybe this type of talk I am giving you now is exactly what is needed to mark a top. I am not sure, we have been through quite a few bear market rallies, this one is very different, as much as many want to say its just a bear market rally.

I have set the stop on my SDS @ 62.31.

4 comments:

  1. FYI this is more meant as a random questioning of myself ... as you know normally I am a bit more precise and would not state "I am not sure" but instead give clear signs on what to look for.

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  2. Chris, we have a great confodence and respect in your analytical technical calls. You have been right on the money. And I see that you are trying to see -- the forest from trees.

    Good luck and have safe travel.

    I too am going to put some close stops and if the futures indicate low opening then put in trailing stops. darn, this market is so tricky. If we long time bears feel that bulls got us by the ----, this could be a top formation. One thing Im learned in the last two months that you always get an entry, may not be the best but money making one, if I can wait.

    i feel the same way. as a small time palyer, I mostly go in the wrong direction -- Costanza syndrom of Sienfield show -- so do the opposite of what you would do. Her si a good blog link that makes good bear case today.
    http://blog.afraidtotrade.com/

    And a good read from Xtrend bolg

    One of the most helpful things that anybody can learn is to give up trying to catch the last eighth - or the first. These two are the most expensive eights in the world.

    The say there are two sides to everything. But there is only one side to the Stock Market, and it is not the bull side or the bear side, but the right side.

    When I am wrong only one thing convinces me of it, and that is to lose money. And I am only right when I make money. That is speculating.

    Every time I found the reason for a loss or the why and how of another mistake, I added a brand new 'Dont!' to my schedule of assets.

    Even when one is properly bearish at the very beginning of a bear market, it is well not to begin selling in bulk until there is no danger of the engine back-firing.

    Whenever I have lost money in the Stock Market, I have always considered that I have learned something; that if I have lost money I have gained experience, so that the money really went for a tuition fee. A man has to have experience and he has to pay for it.

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  3. Appreciate the honesty in your commentary. Have a safe journey.

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  4. regarding forest and trees ;p

    In all honesty, even with the crazy markets we have seen. 880 should not be broken without a proper, "real" retracement. This resistance is too strong to be taken out on first try. You hear me refer to the 8200 on the DOW before. This level is the level of levels so to speak. I am looking for a target of 850-857 first on my current short position. Here is where we will make a decision to retrace further to 780 or possibly go for the last move towards 912.

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