Tuesday, July 23, 2024

Falling Asleep Now…


Sometimes I have written these posts a day earlier... at least part of the post.  It's now 9:26pm on Monday night, and I've already written my Monday Night post earlier today, so this will be for Tuesday.  I feel like crap today, as I have a headache and a sore throat.  I think this weather is getting too me?

Anyway, I wanted to get these thoughts down before I forget them, and then post another boring post on Tuesday.  Watching a video from one of the paid services I subscribe too, they mention how many people go to sleep during the holiday's and then come back and lose money because they're "out of sync" with the market.

I feel the same way.  I want to just take the rest of the year off, as I'm sick of this sideways trend-less market.  You can't make money in a trend-less market, unless you are a day trader... which I'm not.  I buy options and hold for a few days to a few weeks.  But, you can't make any money on these small up and down moves in the market right now.  I guess you could if you were able to track the market all day, but I pop in an out to see where it's at, which makes it really hard to catch the high or low of these 2-3 day moves.

Then you get killed with time decay if you miss the exit.  It's been really hard lately, even when I can pinpoint the support or resistance level that the market will turn at.  For an option trader to make any money, you have to be in a trending market.  Rarely does anyone catch the exact high or low of any market, so you are forced to wait for conformation of a new trend before entering the trade.

That means that you might miss a good portion of the move, if the trend isn't really a trend... but instead just a short lived rally or correction.  I've been really frustrated lately, as you might be able to tell from my posts and comments.  I believe this is exactly what they plan too do... frustrate all the bears, until there are NO more bears left.  I'm almost at that point now.

But, after watching a video about "people falling asleep" during holiday season's, I realized that's exactly when they will take the market down.  Remember Thanksgiving?  While everyone was enjoying the holiday the market tanked on the Dubai news.  Today, they rallied on the Dubai news, as they are getting a $10 Billion Dollar bailout.

My question is... could some other event bring the market down 20-30 points over night?  All the bears are asleep now, so the market maker's wouldn't have to give any money to them.  But, they could take the money from the fat gloating bulls with a sharp pull back.  Wouldn't that be the perfect scenario... screw the bulls, and not give any to the bears?

The ol' "Heads they win, Tails you lose" game.  I know that I personally missed out on the Thanksgiving down move.  I was planning on going short that Friday, and they gapped it down a day before... preventing me from making any money of course.  Crooked?  Yes... of course it is!  Again, we are playing against gangsters, (or should I say banksters?).

Regardless of how crooked it is, we all know it's a rigged game.  We just have to learn how to cheat like they do... which evens the odds, and gives us a fair chance.  Looking at the open interest in the SPY, I see that the 108 level would cause the most pain to option holders for the current month of December.  Now, does that mean that it will close at 108?  Maybe, maybe not?  It only means that all strike prices above and below would cost the market makers more money to pay them out.

It's not 100% in their control, but while we will have such light volume it is possible move the market toward the price that benefits them the most.  I really don't see a sell off that far, but that's exactly what I thought around Thanksgiving too.  Some surprise event could spark a quick sell off, then the big Christmas/Santa Claus rally would then occur until the end of the year.

The level to look for on the way up is at 1126 SPX, which is about the same as 112.30-112.50 SPY.  This will be an excellent level to short at, as it's got huge resistance there... dating back to the 2007 highs.  Since everyone and their brother is expecting the usual Christmas Rally... what if we don't get one?  Right now the percent of Bears in the market is lower then the October 2007 highs... coming in at only 16.4% (Source: Investors Intelligence)!  That's a lot of Bears that are asleep!

All I'm saying is that we... meaning myself and all of you traders that read this blog and others, had better stay awake!  The enemy always attacks when you are most vulnerable... AKA - Asleep!  Yes, this sucks... as we would all like to take the holiday's off and spend it with our family.  Of course that's exactly what they want you to do.  Then you can come back next year and miss a big move in the market.

Believe me... these people are trying to take our money from us every chance they get.  Stay awake, and watch your support and resistance levels.  I think a big move is coming soon, and it will catch most bears off guard again.


Author: Red

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