Bulls got killed again. This is probably the 100th+ time this year. Don’t say that I didn’t warn you either. If you’re still “hoping”, then go back to your corner and keep praying. We broke our consolidation low yesterday, and today confirmed a clean break with a major spike in the last half hour and cut through the 2002 lows. That rally we had? That was a really large bear flag.
My gains for today put me at a +69% return for this month so far (the market is down -25% this month). My students have also pillaged the market with me and took whatever they felt like taking. If you can’t trade this market and/or don’t know how to, then get out. If you are slow to react and think too much about a trade, then get out. If you’re still trading on fundamentals, then you have the right to lose every penny. And give it to me. If you diagnosed yourself with multiple personality disorder, seek professional help. This environment is not for you.
Today’s orders for my subscribers: 1) 9:14AM – hold 25% Short/75% Cash from overnight positions. 2) 10:05AM – Add additional 25% Short. 3) 10:43AM – Hedge all short positions. 4) 11:19AM – Remove all hedges. 5) 12:23PM – 100% Cash. 6) 12:50PM – Add 25% Long. 7) 1:12PM – Hedge all long positions. 8) 2:08PM – 100% Short. 9) 3:27PM – Risk-averse traders cover before the close. That’s all for today. You can’t blame the market for anything, because your successes and failures are entirely the result of your trading decisions. No one said making money was easy, but there is always a way to make money.
Looking forward into tomorrow, if the S&P 500 does not close above 800, then that will mark a continuation in the leg. I don’t really see any positive catalysts that can make the market rally 50 points. We may get a nice bounce to the upside following the last hour crash today. We have not hit a capitulation point, so the rally we do get will be a secondary reaction rally. The market is and will continue to get seriously, downright, and utterly crazy, so remember: if you can’t handle it, don’t trade.
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Thank for this post, your posts here have been fantastic.
What are the primary indicators you will be looking for that might indicate this market is about to have a crazy-move to the upside? Is it a spike in volume? The sharpness of an opening rally? Other conditions that point to being oversold? I realize that we are more likely to continue downward, but the volatility seems like it could snowball either way.
Thanks!
What do you see as the next big support line TA?
Leonard, I was just looking at that. I have 700, 600, and then 450.
450 takes us to 1994.
I don’t actually see major support levels for a while. The next minor one is around 675. I do expect a major bounce sometime, but I can’t put a figure on it. Even though I do love shorting, the entire situation worries me. The future of this country, that is.
SF – No one can depend on indicators. Things like the oversold indicators just don’t work because we’ve been oversold for a while now. The MACD and Stochastics are beaten down. The RSI hasn’t quite reached the oversold level. This divergence will be corrected sooner or later.
I worry more about our country too. Should we be savoring the last moments of the way things used to was?
disagree WTA about all indicators. intraday the tick has been clutch, and the shit I made still works.
TA, Great stuff. Really depressing though.
There are no holy grail indicators.
The holy grail is mastering one’s psychological shortcomings, as they pertain to trading.
We’re all a bit crazy in our own psychopathic ways when it comes to money
Looking forward into tomorrow, if the S&P 500 does not close above 800, then that will mark a continuation in the leg.
There you have it. Today 21-11-2008 the S&P closed at 800.03.
Even with that monster rally – still looks like another leg down to me.