Some of you treat the market like she’s the buxom head cheerleader at your junior high who has finally deigned to give you that “one shot” date for which you have been hounding her for weeks and –damnit — you are going to make that “one shot” count!
But you know what happens… “Mr. Smoove” gets a little too hasty and that “one shot” devolves into an embarrassing “fail episode” which necessitates a “strangely soiled jeans” story for Mom on Laundry Day. That’s never good for the psyche.
However, neither is getting hasty with the ever enticing Ms. Market good for your long term mental health. Take iBC’s very own “Exhibit A“: our friend the Hell Hound. Be cautioned, friend– too many hasty market calls and you too could find yourself warily napping in a tin foil sleeping bag.
So instead of racing off to go do something ungodly after this 90% down day we had yesterday, why not take a gander at something I like to call my “Perspective Chart” —
Here I go again with my “reversion to the mean” theme. Note the contrast between the “normal” bear low’s distance from its 200-day EMA in 2002, and that of the recent low we just experienced in early March. Quite a bit more stretched, isn’t it? That’s what gave us our violent “snapback” we’ve been experiencing for the last number of weeks. The market will revert to the mean, that’s just what it does. And the more stretched out it becomes going away, the harder it will careen back. After that massive plunge illustrated above, can we be dead sure this market’s done careening?
And let’s be open-minded and admit it — today may have marked a new rollover point… or not. 90% down days like today are more often followed by at least temporary reversals, or frustrating grind days. My point is your best bet here is to do as Fly has cautioned — hold fire a moment while you wait to see if you’ve a better place to short.
I’d be surprised if you did not find one at a point higher than today’s close, and maybe even when we meet the 34-week EMA in the low 900’s. For downside, I’m looking for support at the 13-week EMA — 828, and then 800.
Hopefully some silver and gold talk tomorrow. FYI — I mentioned on the comments I had bot some more RGLD last week. Well I also added another 20% to my SLW position at the close today, and will be looking hard at PAAS and GDX tomorrow. Stay tuned and be well.
______________________If you enjoy the content at iBankCoin, please follow us on Twitter