The market is up +270 points! Oh my goodness, it’s such a big day! No. It’s not. +270 points is nothing. The bounce was expected.
Here’s the problem: We lost 9% yesterday, the 4th largest down day in history, and we managed to gain back “only” 4% on the SPX (or 3.3% for the DJIA). I couldn’t be bullish unless the market made a dramatic turn in sentiment and nearly canceled out yesterday’s losses. I’ll need to see another +4-5% up day tomorrow, to even give the market a chance.
The low volume, itself, is no reason to rejoice. In addition, we had another WTF pattern (but to the upside) in the last hour. Even that rally was littered with deep, irregular corrections on the way up. To be fair, today is considered a neutral or consolidation day. I hold onto positions in the direction of the prevailing trend, which means that I remain short.
Today’s +270 point gain didn’t bother me one bit. I’m still up +16.4% (incomparable to the +27% of yesterday) which gives me a large buffer to the volatility and, like many of you, I became numb and accustomed to the 3-9% days we seem to be getting every day. 270 point days, up or down, are no longer “big” days, they’re “normal”. Do you remember the times way back when 100 points was such a big deal? Those times are gone. Welcome to the world of eye-popping volatility.
My timeframe is also to swing these stocks, therefore I keep my plan in mind, unless something drastic happens tomorrow. The swings may frighten many of you, in which case, you should not trade. Many losses are incurred within a neutral trading range. Exercise some patience and discipline, or just sit on your hands and stay in cash.
Make note of the support and resistance areas for tomorrow. If the market does breakout from it’s range, it becomes an uphill battle that requires some type of positive catalyst. The rally must be strong and continuous without deep sell offs. If we breakdown, that will be confirmation of retesting the lows. Either way, monitor the situation with hawk eyes.
SPX 1-day
SPX 3-day
SPX 10-day
I’ve got in my notes “Below 825 area short massively”
you said in your post “if we break down it will be conformation ” how far of a break down before i become brutally bearish ?
i like your charts ..you pimp them out nice
what if chart moves to the upside
watching cramer…he is an idiot…saying that we have bottomed and are on the road to recovery.
also, i’ve been following xtrends.blogspot.com – he is in the same boat as you and has been on top of it for quite some time (very sharp dude)
Any sustained breakdown below 820. Or, if we get an up day that’s less than +3%, that’s also a short. Anything in between is a short. A power rally closing above 900 is bullish. Strong vol has to accompany these moves.
He wants to be SEC Chairman. What a fucking joke.
agreed, fucking joke, everything a part of CNBC is a fucking joke..
any predictions for tomorrow, futures are negative for the moment, i am personally thinking we get below 800 in the next few days.
WTA:
Congrats on the tab. Your charts depict clean information and humor. Please keep up the great work.
He bragged about his resume but his resume is also a joke — remember all the false bottoms he called?
Someone should sue him and get him off-air for good. He’s wasting the 6PM time slot.
I think the 27% was a gift and you should have taken it. Today, you sound like you’re trying too hard to justify it as a “swing” trade and “buffer” of volatility. If the bounce was truly expected as you claim, you should have went long this morning and back to short at the close or tomorrow morning. I don’t mean to be negative. Obviously, this trading style has been profitable for you. I just think you’re making bold statements for your second post and it is a disservice to most readers who don’t have the same experience or mental fortitude. As you mentioned, this trade and volatility would frighten most of them. You could have easily taught readers the value of taking partial profits on a killer day as you had yesterday. Anyways, I hope it works out for you and you get back to that 27% or even more. However, this market is unpredictable and I think quick profits is still the name of the game. Good luck.
Thanks, Chart Junkie.
OET – I planned the swing trade on Sunday, but I understand what you mean. I just didn’t really care too much about today. I’ll care more toward the end of the week.
I agree with OE there, about a systematic approach to taking profits should be used by new traders; but then again I like Addicts style. If it works, then why change it? It’s kind of like the guy who comes running down the court and shoots the transition 3-pointer… he makes it and puts his team up 1 point with 20 seconds left, then he is a hero; he misses it then it’s the worst shot in the world. Regardless, the shots have to be made.
(Cramer) wants to be SEC Chairman. What a fucking joke.
Quite rational, actually. As SEC Chair, it’s unlikely he’d get the proper regulatory investigation that he deserves.
________
Not quite the down day I was expecting…SRS sucks, should have sold it at the open…
5 words: Head Snapping Bear Market Rally…
175% short still? That’s DEVILDOG-like.
still fucking short.
I have to admit, it was getting to my tipping point, but then the 20-day MA came to strike the market down.
New lower LOWS this month.
Does anyone have a comment on this?
http://www.dryships.com/index.cfm?get=report
RC? DD?
Never short whenever Obama speaks. Best way to get your balls cut off.
When is Obama Speaking?
well the SPY has crawled over the 9 ema and is just below the 20 ema. The employment news lies in front of the market on FRYday… if 900 can be taken out on a closing basis and hold for a couple of sessions then the ABCD pattern that potentially exists on the charts can look to unfold.
caveat the B point is the 900 from Last Friday and we would need to accelrate over that point on volume greater than 490 Million….( I am using the 50 sma volume figure to benchmark the volume required to confirm an ABCD up
GE is getting some love here as well as XOM…. it takes a lot of money to push those stocks higher considering their share floats.
still short?
The SPX dick slapped the 20 day in teh face.
some more confirmed ABCD’s up…FSLR AMZN….
I have to admit, it was getting to my tipping point, but then the 20-day MA came to strike the market down.
December 3rd, 2008 at 1:34 pm
did you stop out?
To make a long story short…
I stayed up very late into the AM watching the futures…
Then napped for a few hours on the couch, woke up before the opening bell, watched them take the -160 futures and then: JACK us up.
I knew that it would be a repeat of yesterday at that early point.(Although, I guess we dipped for a head-fake in the Dow midday)
Within 15 minutes of the open, I was out of my short posititions, took an Ambien, and went to f-cking bed.
I can’t play this game the way they are playing it…had to go to cash and re-group
I feel like I worked out all night because of the mind-fuck that is Wall Street (at this time)
Now let’s go kick some ass.
Fair enough Addict, regarding your response above. Not sure if you took some off the table on the early morning weakness but if you’re still short, I may swing short with you tomorrow before Friday’s job report.
I suggest you cover all shorts tomorrow on the gap down.
We’re not going lower.
I tend to think if we are going to rally it will happen big tomorrow I just have this big problem when the biggest gainer is SNDK on buyout rumors round dos.
And then there is this:
Toshiba: Not Planning To Acquire SanDisk
12 minutes ago – Dow Jones News
Related Companies
Symbol Last %Chg
SNDK 9.02 25.10%
As of 4:00 PM ET 12/3/08
TOKYO (Dow Jones)–Toshiba Corp. (6502.TO) reiterated Thursday that the electronics maker has no plans to acquire SanDisk Corp. (SNDK).
Speculation about Toshiba’s buyout of the U.S. memory card maker “is not factual,” said a Toshiba spokesman.
Shares of SanDisk soared more than 25% Wednesday on speculation that Toshiba was considering buying it. Toshiba shares fell 1.6% to Y307.
Wave C,
Obama spoke this morning. Never short on days he speaks. Go long and especially solars.