Wednesday, May 13, 2009

Why I closed out 50% of SDS


  1. Thanks for the graph Chris. Ive just managed to log in and have responded to yout twitter request on your other post.

    Chris, are you expecting SPX/SPY to go up to the top of the trend line on the channel on the graph before the final leg down? If so what do you feel about a short long entry?

  2. tomorrow's call from the blog: FYI

    " the system says another down day for tomorrow.

    Will go to 1.5x.

    It might pay to trade something tracking emerging markets as they will probably react badly overnight to the domestic move today

    I am looking for a turn here, biased for UP into Fri 05-15, my next 3 week cycle date. Cumulative Intraday NYSE TICK is oversold,...I am leaning toward Long for Thurs.

    Regards, Jim

    Wed May 13, 03:28:00 PM
    Forecaster said...
    Yes, We could bounce as some are looking to buy dips. That is why I will trade the emerging markets...hoping they will gap down and hold negative even if the domestic markets bounce. Good luck all!

    Wed May 13, 03:34:00 PM

  3. From a subscribed news letter: Institutions were in Accumulation with their Buy/Sell SPREAD decreasing. Buying decreased, with selling increasing ... Note that the Selling did close above a resistance line on Monday and there is still a shorter term horizontal resistance line to test. Yesterday's increase in selling is now close to testing the upper horizontal resistance line. This intensifies the Alert Watch on Institutional Selling now. Institutions are still in accumulation ... this is still not a condition to short against.

  4. From a good blog, Chris you are right many bulls and bears will not have a chance to ride the trend. EWI analysis: from:

    Last night I said the alternate count was that the market had formed a wave [i] at Tuesday's low and the late Tuesday rally yesterday was a wave [ii] peak. Today I adjusted from that alternate count because today's squiggles support something else ahead of that more bearish count. I also perhaps am fixated on those 200DMA's of the SPX and assume support will bring in buyers. But in any regard, I am willing to allow for upside surprise (theme of P2) for now until the key 865-880 support span gets seriously tested. I want to see how that interacts first. In fact I will be a long buyer for a short term trade at 875 and set stops. Who wouldn't? At least a bounce back to 898 mighty be very profitable...
    However I was surprised to see EWI did indeed call yesterday a Minute wave [i] low and wave [ii] rally in their update tonight. That implies any bounce will be capped at, say 900 max, and then a very bearish "third of a third" will just smash right through all that hard-won breakout support.
    It could happen of course which is why I list this bearish scenario alternate count. It doesn't yet "feel" right that the market is producing such large impulsing down patterns already and that the hard-won support will just get taken out after only a weak bounce up.

  5. The best strategy is to keep average down and short when spx retraces up and not worry about the perfect entry, especially when the down side is move is going to be so big. easy said then done. discipline, discipline!