Today, we were supposed to be up 200, not down 200. At least that’s where I honestly felt we would be heading. I will probably be buying this dip near the close. This sell-off just felt a little soft.
Okay, off to the intraday charts… (click to enlarge)
- Today was tricky. Market just melted down all day at a rate of like 5 points every 10 minutes. So, we had a pretty steep slope. Maybe everyone was thinking we would rally?
- First 3 hours of trading we “flagged lower” and lower. One thing you should always be aware of, whether you are swing trading or day trading, is that a bearish flag near the lows almost always leads to a new low.
- The attempted rally after lunch (12:53) looked really good. I saw FAS rally from -6% to +2%. But then out of no where, the rally got shut down, and quickly sent market to new lows. This was really unexpected for me! Volume is low, hence VIX is skewed (very flat), and usually when the VIX is sleeping I lose my edge. If you noticed on the VIX, it had a nice and steady straight line up. How am I supposed to find a reversal point if we get a straight line up! The VIX measures volatility, hence, it needs to be volatile itself.
- I made two ugly calls on the tape with FAZ. When FAZ was red, I thought the trend had reversed and thought it was going to go even deeper in the red (approx -5%). However, both times I thought that would happen, both times FAZ rallied back +5% in a matter of minutes! Goes to show, its tough to bet against an obvious trend that we had in the morning hours.
I guess the mistake I made today was expecting too much that the market was going to rally after seeing what happened on Friday. Turned out, that brief squeeze on Friday was a shake-out of the weak bears. Nevertheless, we are coasting in oversold territory (I hate that word, “oversold”) and so will advice to NOT enter new shorts here. For now, I’m waiting for the VIX to see if it wants to get below 51-50 before trying to catch a relief rally. If the VIX gets back to the 40s, the bears will panic.
So far, its great to see all the new members on The PPT. Just get used to the system and take advantage of the community there. It’s a very valuable resource. If you ever have any questions about it, let me know.
laterz traderz,
-gio-
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gio,
I agree with you 100%…i was on wrong footing all day…i basically shut down except for small ill-advised USO trade and meaningless FXP.
Take your mind off the wrong-way day with this video featuring glacier wave surfing and hole-in-the-ocean surfing: http://www.latimes.com/sports/olympics/la-me-slab21-2009feb21,0,6304119.story
Gio-
It is refreshing to see that you are human!!! Thanks for sharing the “not-so-great” days with us too. I agree with your sentiment. I covered all shorts today, albeit a little too early. I bought into the close which could have been a bad move. Time will tell. I think we are due for a bounce…or crash. Who knows?
fox… I am a robot. or an alien. I’m a robot alien. Take your pick. Humans need sleep.
but yeah, getting it wrong is part of the game. just chill and move on.
I was expecting a little bounce too so you’re weren’t the only one on the wrong side today. It is crazy out there – this is looking more and more like an October 2008 setup where oversold doesn’t matter.
What do you think about us breaking to new 12-year or so lows but the VIX not being even at its January highs? That scares me.
Hey Mac…. u got a good point, and I’ve been thinking the same. either the market catches up with the VIX or the VIX catches up with the market. but like I mentioned in my post, the VIX is ready for a sharp move soon, and if it can’t hold 51 it could drop a few points.
Just a question here, but doesn’t it make sense that today’s carryover on the downside could be relative to options expiration? Wouldn’t today have been Europe’s day?
JFF
I think many of us were thinking of taking the bull by the horns today, only to find that the bear came out of hibernation and began a rampage into the final hour and a half of trading. I think Mac makes a good point too, and I am beginning to agree with his, “Oversold doesn’t matter,” plan. It’s scary to think we got this low.
Any thoughts on if the market has pushed itself to the November, “Enough is Enough,” stage yet?
You will get crushed on all longs.
Look what happened on the dow once it broke through Nov lows.
Guess what? S&P and NASDQ is next.
Keep buying, its good for the shorts out there. You will have to sell your longs adding fuel to the fire.
Holy shit, Otts, that Garret MacNamara dude is gone.
You see the far away look in his face when he said “I just don’t get the rush anymore?”
Dude’s like a coke addict!
________
Kobe was found with traces of steriods in his system !!!!
Rumor has it that A-Rod was bending him ovah. (I knew it)
Very Best Regards,
World Champions Boston Celtics
Yeah, Jake. Made me glad he does his thing in the middle of the ocean.
Hey Mike… I just sent Kevin Garnett a “get-well” guard.
@ottnott … that’s a sweet vid. check that near 30 footer at Jaws Maui. this guy is a trip.
@JFF …maybe. I’ll count 3 days after options expiration to get through the OE effect.
I thought we’d get a bit of a bounce today as well. Everywhere you look — price, indicators, volume, Bob Pisani’s hair — it’s all crushed against the floor. Second law of thermodynamics I suppose.
Admittedly, I was with the flow of price for most of the day except for a long swing trade that closed out early (for a small loss).
~Shepard
=^.^=
Marketsci’s abnormal market filter is at 100% lol. VIX 15 min bars bounced off 34 ema after the top at friday high. Missed the smooth slide sleeping in, one of these mornings SPX will be down 150 points and I’ll think about getting on the HI trader pre-dawn patrol..
I was looking long as well today. Even though wrong, the ingredients are there for a bounce under typical scenarios, but like Mac said, if this Oct 08 oversold doesn’t mean diddly right now. The thing is the market was oversold and remained oversold for two more HUGE days in Oct 08, but if you were vigilant and stayed the course, you got profitable on 10-13-08. I bet a similar thing happens here.
You got an rsi(2) less than 0.5, can it get anymore oversold. Gap way low and wait for the pop up.
Great to see I wasn’t the only one side swiped. i mean, not great, but yeah, whatever.
my plan is to get short and long, with the intent of losing money on the shorts. if the VIX does break down below 50 I don’t want to miss it.
Back in November (about the time I penned ‘DOW to 6,500’), I overheard someone talking about how it was the deal of the lifetime at those prices.
I stopped reporting GA strategies because, there is no trend. And if there was one, they would have found it.
The VIX is dead because the volatility left the market.
@Cuervo Long term trend is down, I never forget that. I think what we are looking for is a “tradable-bounce”.
I stopped recommending individual longs for a long time because if we go by CANSLIM rules, then the “M” does not permit us to get aggressive long. But that doesn’t stop me from studying and observing what is working, therefore I’ll make a little education, home health care, or gold shout out every now and then. the market needs new leadership to hit a real bottom. it probably won’t come from education stocks, but I probably will find it.
That song is as weak as the Lakers bench.
I think the fat boy singing needs to learn something about “the way she moves” and incorporate it into a daily workout.
Gay.
I love you though, Gio……you da man!!!!!
lol… yeah, that vid is weak. but i wanted to show you all the ratio of ugly men to beautiful women in Hawaii. Its about 1:20. So, you have a chance!
When Kobe’s on the road they chant “M-V-P” … when Pierce is on the road they chant “over-rated”
hmmmm.
lol. take it easy dude.
btw… i need a gap down market so I can play a squeeze. it seems like the weak bulls keep selling into whatever morning gaps are given.
keeping it classic. shorting everything, including FAZ. getting long w/ VIX < 51.