Ok I had closed out all my shorts since Monday with the last batch closed out yesterday. My initial plan was to try to get back into my shorts here shortly with some new additions and slight changes after having had a great run.
However, while going through my watch lists yesterday I have to admit I was quite surprised. Looking for short setups I saw the majority of them in a bullish pattern with strong support just on their door step. While calculating proper stops for each position I realized that risk/reward ratios are not very favorable at the moment as I had to assume too much upside risk with many being close to support. Of course breaking said support will bring a nice wide range of gains but I could not get myself to find entries that are favorable.
As a result, out of the 50+ positions I was closely watching I only found a handful that showed signs of weakness with a high probability move lower. Due to the current conditions I am going to keep my short exposure very limited until we can see a clear break towards a move lower. I am not afraid to miss the boat here and the market is at an important juncture in terms of 200dma and 50dma.
It is very interesting that we have had 2 days now around the 890 range here and have not seen volatility step in in terms of moves to the downside. MANY bears have had a great run and want to protect profits - me included.
Special Note
I have been slacking quite a bit the past 2 weeks to provide proper guidance as I had done in the past. Between many work related items and personal issues I have not had the time to properly outline market direction via the blog. I tried my best to give important turning points in short notes or via comments but did not find the time to properly describe confirmations and anticipated moves for bulls and bears alike. I should be back in normal mode in a week or so when non-market related items in my life have slowed down a bit more. Sorry, everyone =)
Still good to get whatever input you have time to post. Thanks. Steve
ReplyDeletegood trade chris. I think we see higher spx 3 waves. today and tomorrow but then down in 5 waves next week may be to 875 and 850
ReplyDeleteHow does this look now Chris? all bears have become cautious now. all over the blogs fear of new high and even 1000. can't blame them.
ReplyDeleteyeah its totally understandable. Even evil has exited shorts lol
ReplyDeleteEither way, I went out on a buying spree again and purchased small chunks of equities I am waiting to short. All of them are small positions (all bearish) with around 30% capital exposure and no stops yet. I did that this morning with the anticipation of either dropping as we are now (which I did not think would occur) or a test first at 924 where I would have added the rest.
Its difficult taking a position now, thats why I made that move, I do not trade the remainder of the day after fed meetings. Will wait out the close and the overnight action. Only new positions 9:30 the next day =)
what I meant to say was that I started shorting quite a lot of equities today (not buying or going long) - it reads a bit funny so I wanted to clarify.
ReplyDeleteI am thiknig of going short tomorrow also. we may see a bounce to 914-916
ReplyDeleteAre you still holding onto your long UNG? Are you planning on adding more if it goes down or do you have a stop in place?
ReplyDeleteStopped out of UNG already. Going to give it one more try at 13.85. To be quite honest it should continue lower based on what its setting up for so I may let this one walk away. There are many other opportunities to be had.
ReplyDeleteI re-opened my oil shorts today as well. Going to continue on the dollar play with the assumption that we get strength.
it seems that the next two days are critical to determine, if we get bear move now or wait until fall according many EWers blog.
ReplyDeletegot a break 882 and then 875 to confirm bear trend.
would be interested to know about your TA veiw point.