Friday, December 4, 2009

Blogsphere Emotions

I wanted to share some general thoughts on whats going on in the blogsphere. It seems everyone is ready to accept that we topped, the majority of comments I see are about longer term positioning for puts and shorts, and that we are finally turning lower.

As much as I agree from a fundamental perspective (well you all know me, I am as bearish as they come, even during a 10 year bull market). However lets review some facts:

1. We made a new 12+ month high today
2. We are still up on the day
3. We are within 1% of the most recent high swing

All of those facts still point to an intact uptrend - even if we move lower towards 1016, this is still a fully valid uptrend as much as I hate to admit it. I am very surprised to see bearish traders come out stating we are going down and this is it. Maybe this is the pre-stage to the last bear slaughter we will see this year and a xmas 2008 like rally to end the year or this is really the move lower.

After I had changed back to my short term system, my head has become a lot clearer and I am looking for pattners based on price and not based on opinion (well a little bit heh). We have many bearish divergences and the past 18 trade days on SPX look like from some very thinly traded penny stock. I mean seriously look at those daily candle sticks on SPY. Incredible. Not very bullish at all.

Now, me personally, I was ready to be 100% short at 1016 when we had tested it the first time with a target of 880. We are now 100 points higher, amazing, but the same still applies, I am ready to be 100% short at 1016 - AFTER we retest it from breaking into triple digit SPX - think about it. Yes I would love to be short from here to get all the way to 880 from 1110+ but come on - we all know we never get 95% of a move in position. The point I am trying to make, I see in many other traders now how stubborn I was before, wait until the trend really changes, then get in and position yourself. Its probably the biggest lesson I learned this year at my first attempt at IT trading (remember I used to be short term only).

Lets see how this plays out.