Yawn at market

Here’s the dangerous setup for bulls:

1) Declining Vix = complacency

2) High volume selloffs + …

3) … low volume rebounds (Sisyphean Rallies)

I suggest exiting some swing trades, both long and short and ignore short-term technicals. As we head into quadruple witching Friday, there should be some nonsense action going on as volume picks up in exiting positions before the end of this horrible year. There are just too many bottom callers and too many “next-leg-down” callers heading into the final days of the year. The market is telling you something folks… we have some HORRIBLE news these past two Friday’s, and the market recovered on both of them…. odd thing, people are still thinking this is a huge bullish signal. Friday’s recovery from the auto-bailout news was weaker than last weak.

If you are a new trader, please turn off your TV. In fact, turn off your computer and just wait for a proper breakdown or breakout. The highest probability trades out there will probably be earnings plays, perhaps a stranggle on the conference call. Other than that, let’s keep them light. If you want to play, there a few opportunities, long or short… I am keeping a list of shorts that are rallying on low volume (which I will begin shorting as the Vix hits the 40s), while buying longs that move up on high volume, but buying the pullback. As you can see, I am taking a “let the trade come to you” approach.

ALoHa!

Gio, theHawaiiTrader

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The weather here has been quite schizo.  Someone on Twitter told me the weather patterns in Hawaii could be correlated with the stockmarket.  That sounds about right.

 

This was our weather on Monday when the market was up…

 

Here’s what it looked like in “paradise” yesterday around 4pm.  I took these with my BlackBerry:

Nothing to do on this rock when it’s raining.  I was bored, so I decided to rig a few keyboards at a friend’s house.  

 

The torrential rainfall cancelled about three events I was scheduled to go to.  So I decided to take my illegally immigrated friend to Borders for some reading material…

 

This is how the weather is like today…

 

@#$%@&@$&*#@$^*#%$#@@%^&^*()%*&&$*^%%$@!#!?!!!

 

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Dow down -10000000000000000000000000000000 this Friday!!   …………..pffffft.  whatever.

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A bull needs somewhere to go, right?  All bulls are welcome here on my blog, since I’m sure if you hit up any other blog you will get stiff-armed by a bear.

Right now I am 100% short.  Sold all my education stock longs yesterday and sold my GMXR energy long too, so already I’m coming into tomorrow feeling like I’m on first down with 20 yards to go.  For now, I’ll just be the coach and watch what happens in the first few hours. Then…

Let’s see if I can do this…

And not let this happen to me instead…

 

For reals though, you guys need to stop obsessing over futures prices in a low volume environment.  If we do open seriously gapped down tomorrow, then I will let the trade come to me.  In that case the Vix will probably spike once, trickle up then spike again, then I’ll come in from behind for the sack.  Look out Drew, they’re coming for you.

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“Beware of Thunder Thursday!”  Comes always on the news.

.. too many Thunder-patterns in the commodity and energy related sectors.  And it sure is storming here in Honolulu too!  I shorted ENER, EGO, CLR in the final 2 hours.  EGO (+6%) was an overnight from yesterday, ENER (+7%) was a daytrade, and CLR(+7%) was supposed to be swing-trade but had to take the profit on this sharp move.  Probably just as good was selling my GMXR (+14%) long before the “Thunder” developed.  I knew she was too hot for me, had to dump her. 

RC was a bully on the energy plays… in the overnight DXO long, short HK… stealing lunch money from both the bulls and the bears.

Welcome to the Auto-Shop.

 

My sentiment on the market still stands.  The Vix still did not put in a good spike down, therefore there are no high probabilities for a reversal.  Be smart and take your profits long or short whenever you can.  Continue to use volume as your top indicator.  Turning to the price/volume/momentum indicators I shorted the energy sector on the news when I saw the volume evaporate and the momentum just flatten out.

[Click picture to enlarge]

Aloha to my new Twittercool friends.  Roll call…  DrNate rides the invETFs; Brasil61bringing the heat from Miami; FousTechTrader is all technical… wazzup again!; NickFenton takes one for the daytradeteam… howzit!;  timothymoore reps SoCal traders, best geographic place to trade; k_blake got lots of Options.

See yall on the streets! 

	k_blake
	timothymoore / Tim Moore
	nickfenton
	bkmrkr / greg
	FousTechTrader / Cameron Fous
	stosh23
	brasil61
	dr_nate / Nathan Mueller
	carczar

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I really can’t recommend any powerful longs right now, as long as I see leaders like AXYS just crumble and fall like yesterday. sheez. although we are in a “confirmed rally”, watch out for Thunder Thursday.

Once again, follow the Vix to the high 40s for a higher probability to short.  After scanning through yesterday’s market (I was out for the day), I think the bears scored a point in that one.   One spike down in the Vix, then the Medes and the Persians end Nebuchadnezzar’s party.

 

-gio-

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