Hi Sundancer, it is hard to stick with a position when I am not the one coming up with the analysis but you have been nothing but right and I appreciate the reminder. I am still short. Both you and the some of the economists that Red posted quotes suggesting that leveraged instruments were dangerous – one of the economists suggested that they would become worthless. I think I will stay in puts until the move down to 105. For the next round down, I will just short the SPY outright even though it won't be nearly as lucrative.
I plan on staying in my position now. I do strongly believe we will hit that gold containment line around 1050, and I agree with you that I need to stay focused.
I'll probably have to set some trade triggers for tomorrow, as I have an appointment in the morning to do, and won't be able to get to a computer. The last time that I was gone, the market tanked (Monica is rough on them Bulls… LOL). I'll be here today of course.
Anyway, thanks for the reassurance, I'm sticky with it, and will stay short until the gold containment point is hit.
FTSE is down sharply this morning, which gave me an idea how a fake bottom and rally might play out:
They are at about a 1/3 correction on their rally, so we open down (about 1120) and rally with them, taking us to 1186 after their market closes, or maybe tomorrow.
After that, the pipe continues.
I'm planning on buying some calls at the fake bottom if it happens.
We certainly could just drift up or slightly sideways for a few days, but that would be too easy I believe. Looking at any chart, and everyone is waiting for a backtest of the broken support line at 1180 spx.
If you were a market maker, would you let the bears get on board short from that level, or stay just shy of it, and tank it without letting them on get short? They would chase the tape down, just like they want them too do.
I went short about the same level, about an hour in, because the rally looked like it was petering out. So we're sharing the boat.
One scenario that I'm entertaining is that the market could drift up slowly the next three day, just a few Dow points per day, and turn around on Friday (new moon). That would be maddening.
If we dip tomorrow morning, I may pick up some June calls as a hedge. If I blow the direction, at least I will have some insurance and, if I don't, they should be good into the next rally even if they get pasted in the meantime. I will avoid AAPL because it's been getting too much play. Maybe F? This market will probably scare the UAW into settling up on their warrants.
Hi Mon,
If options were to become worthless you might as well give up the ghost. The Commercials actually use leverage in a native sense.
Plot your own containment lines. Google “George Renya The Midas Touch”
These will be close enough to do your own analysis. I believe in teaching the folks to fish.
There is very little that is new under the sun. The most successful investors have mastered position size which is the toughest act of them all.
Hi Sundancer, it is hard to stick with a position when I am not the one coming up with the analysis but you have been nothing but right and I appreciate the reminder. I am still short. Both you and the some of the economists that Red posted quotes suggesting that leveraged instruments were dangerous – one of the economists suggested that they would become worthless. I think I will stay in puts until the move down to 105. For the next round down, I will just short the SPY outright even though it won't be nearly as lucrative.
Thank you for the update.
I plan on staying in my position now. I do strongly believe we will hit that gold containment line around 1050, and I agree with you that I need to stay focused.
I'll probably have to set some trade triggers for tomorrow, as I have an appointment in the morning to do, and won't be able to get to a computer. The last time that I was gone, the market tanked (Monica is rough on them Bulls… LOL). I'll be here today of course.
Anyway, thanks for the reassurance, I'm sticky with it, and will stay short until the gold containment point is hit.
Red, your going to get whipsawed out of your positions listening to 10,000 different people
What is important is understanding the dance of the market.
I posted this chart back on 4.11.2010 showing you the daily containment pt. that was going to get backtested
http://www.flickr.com/photos/47091634@N04/45102…
Then look where the precise bottom was last Thursday, that pesky light blue containment
http://www.flickr.com/photos/47091634@N04/45850…
Downward pressure will be on the market until gold weekly containment is hit, no new highs are coming until weekly containment is hit.
http://www.flickr.com/photos/47091634@N04/45890…
FTSE is down sharply this morning, which gave me an idea how a fake bottom and rally might play out:
They are at about a 1/3 correction on their rally, so we open down (about 1120) and rally with them, taking us to 1186 after their market closes, or maybe tomorrow.
After that, the pipe continues.
I'm planning on buying some calls at the fake bottom if it happens.
I have been posting the DWC/DIA ratio chart for quite some time, however, I never plotted it against the SPX.
Seriously, take a look at this. And the PRS 133 on the ES and the EUR/USD, and the Fear Factor, and Chart of Charts, all say the same thing….
Don't be deceived, it's easy to be a bull and predict up, but this puppy is going down and pretty darn soon!
Thanks…
I was off on Black Monday, but who knows… maybe Black Tuesday or Wednesday? Being only a day or two off isn't too bad. LOL
Great post Red …. loved your weekend post too ….
We certainly could just drift up or slightly sideways for a few days, but that would be too easy I believe. Looking at any chart, and everyone is waiting for a backtest of the broken support line at 1180 spx.
If you were a market maker, would you let the bears get on board short from that level, or stay just shy of it, and tank it without letting them on get short? They would chase the tape down, just like they want them too do.
I went short about the same level, about an hour in, because the rally looked like it was petering out. So we're sharing the boat.
One scenario that I'm entertaining is that the market could drift up slowly the next three day, just a few Dow points per day, and turn around on Friday (new moon). That would be maddening.
If we dip tomorrow morning, I may pick up some June calls as a hedge. If I blow the direction, at least I will have some insurance and, if I don't, they should be good into the next rally even if they get pasted in the meantime. I will avoid AAPL because it's been getting too much play. Maybe F? This market will probably scare the UAW into settling up on their warrants.