Tuesday, July 14, 2009

Decision Made

I just initiated around 50 new short positions. Some of them were previously covered positions at better prices. Additionally I added some new ones that are banging their head against resistance.

I will add a hedge above 900 and will continue to add more positions. I have temporarily removed stops on existing positions that were too close to re-evaluate after the close.

11 comments:

  1. Hi Chris,

    Can I ask what indicator you used to initiate this buying frenzy? I added a large amount of shorts yesterday at 899 and have been questioning my decision, so wondering your logic.

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  2. Curious as well, as the other "Anonymous" =) Thanks Chris.

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  3. I had reviewed many of my positions that got stopped plus the other 200+ on my watch lists. Last week many were at important support ranges and it seemed they were setup nicely to rally.

    However, what appeared to have been an attempt to rally with many failed at previous highs. While I did get stopped out of around 20% that broke previous peaks the other 80% of existing positions and items in my watch lists were lagging quite a bit.

    I will go into more detail later as to why I made those moves. As I have a bunch of new positions I want to watch them a bit closer to make sure I made the right move.

    Also take a look at many trend lines, look at AAPL for example, or XLF, or even SPX from the most recent highs. They are still operating within the channel we have outlined. SPX is leading most of them a little bit but considering key sectors are not showing the same strength I have made this decision here to attempt a very low risk short.

    The other one is the DOW that bounced perfectly off the 200dma, SPX bounced perfectly of the 20dma and should now continue to be contained by the bollinger bands.

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  4. the one one to look for is EURUSD (if you have access to the forex chart). Draw the 50 dma. You can see its hugging it and keeps on getting squeezed higher but fails at making any new attempt at highs.

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  5. I just entered a hedge here with a 2:1 ratio - meaning 2 short and 1 long to offset any rally higher. I may add more hedge if we get above 904.

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  6. adding some more hedge here if we break 901.

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  7. ok low of the day should be in at 10:45 (off by 25 minutes sorry).

    Remember the importance of 906 that I had stressed. If we violate we should see a bit of a rally all the way to 911 and should reverse from there within 2 hours.

    Currently hedged 1:1 short/long so its ok for me whichever way it goes at this point.

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  8. Chris, how does it look now. 906 seems to be the the number to beat. do you still think we see 912 test?

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  9. difficult to say. Thats why I mentioned this number today in the post and in the comments. Its my new line in the sand (previous was 912 though that is still important).

    I do not think we will see any big breakout to the upside today. Probably close sideways and potentially more upside tomorrow.

    My current bearish views have a bit of a time limit on them. If we are not to get below 900 by end of this week - I will probably close out a substantial amount.

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  10. Hi Chris, are you still keeping an eye on ung? Any thoughts on that? Unfortunately I'm still holding on to the pain.

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  11. Accroding to some time cycle analysts-- we may see an attempt of a seconary high by 7/22-7/23 followed by crash and by 8/20 (SPX 821) a significant bottom . does this scenario fit in your analysis? August 20 bottom may take us to dreaded 1000-1050

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