These bouts of discouragement each time the Russell bottoms (May, August) is pretty easy to read. Let me show you how to do it.
First, think of what you like to do on bounce days…you like to chase the market up. Leaving yourself vulnerable to market weakness. You then think “Good hell, what a weak bounce!” So you short into the hole. Dumbass.
Last Monday, markets were off by about 1.5% a piece. I put out the same idea; what hurts the most participants? That day was similar to today. Think about all the dip buyers from yesterday all stopped out today. Think of those that shorted into the hole here as well. What move hurts the most?
If your bias is long, do what we did yesterday. We went with the approach that less is more. Didn’t do anything. We just watched longs from Tuesday do work. Those longs are still holding well, despite this sell-off. Since we didn’t follow the crowd up today, I prefer taking action on days like today.
There are a few things we like to see to establish tradeable lows. Positive divergences in risk, initiative buyers, and valid oversold signals. We’ll hit each one of these items this afternoon.
Speaking of which, I am offering a free trial to After Hours with Option Addict for the remainder of the week. Come join us to evaluate your trades, chat about the market, or just hang out and listen.
Click on this After Hours with Option Addict link to participate.
OA
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have to leave for an hour or so. Taking a chance and setting a buy order for NQ 3997.25
i just grabbed the most ridiculous sandwich ever at this place by work called Daily Melt. Roast beef, monterey jack, carmelized onions, all cooked and melted on a sandwich press.
Matt – that sounds heavenly. Btw, this post made me think of the time that Texas fan received a ruptured testicle at the hands of an Oklahoma preacher. I’m not feeling that level of pain, yet. http://www.foxnews.com/story/2007/09/12/texas-football-fan-nearly-castrated-in-bar-fight-in-oklahoma-bar/
where did you get that picture of my left nut?
lol iBankCoin logo top left of the page. BEAR X-ING!
logged in to your site (on the cheap – free). I liked the way you explained your ideas and the current market. I also went over and listened to the first in your series for option trading – good stuff. Thanks.
dollar way overbought – corrects down to 80 at least. NUGT to 55
lol
That might be the most uncomfortable trade ever, on topic.
Jeff – it has gone circa 2000 dot com parabolic. Mean reversion will soon take place
Bro, you’ve told me that since I started blogging here.
I now have 15000 NUGT at average price of 31
hey I like you and that is why I am gifting you this trade. Gold and commodities are setting up for the buy of our lifetimes sometime in the next 6 months
No wait, I gave you the opportunity to shelf that Gold shit last year. Buy it at $900, it will get there.
OA,
Ive heard $6.50 as a price target for Silver longer term, do you have an opinion?
Gold first spiked on inflation fears after QE and has done nothing but go down. The USD could be showing signs of an improved US economy. If we buy gold and sell stocks because rates are slowly rising and the economy is improving how does that make sense?
if you ask what hurts the market the most the next day, we will just zig zag every single day then. at some pt, there has to be a trend
Dammit chub…we’ve done this before. You forget things so quickly…except solar.
Anybody else think today feels like a hammer candle in the making? The Russell’s Market Profile looks great. Been sitting right under yesterdays lows forming balance… looks like path of least resistance here is up. Let’s hunt some stops!!!
it’s either a hammer and reversal, or the top is in. maybe not THE top, but intermediate instead of short term.
I feel sorry for what is about to happen to you mo-mo trendo traders
aren’t you banned?
Are you banned? Are you KEFF KCULLU-UH?
apparently the bannings are fake
You can’t ban that guy. He’s like the black knight in Monty Python. Remove his arms, legs and balls and he still wants to engage.
bahahahaha
Bring me shrubbery
Just a flesh wound
Hey Jeff….what do you think of ol John Deere?
You must have missed that long in DE I called out back on 9/11…
indeed i did. you were pissing excellence so i was trying to get out of the way.
VIX making a daily high while indices are above their lows. Coincidence?
IWM has broken down through the uptrend line that began in August of last year. MAJOR technical damage, guys.
I like the emphasis of MAJOR.
OA- I know we reviewed KORS last night and looks great on the weekly (bullish declining pennant). However, there is a huge volume pocket below 72/73. Havent salvaged this idea as yet RSI shows oversold levels. I am holding Oct calls. Should i roll forward or we got time? Let me know when you get a chance. Thanks.
I am a bull, holding October calls.
thanks man.
Hang in there dude. I’ll buy you a KORS purse when we book gains.
LOLLL
If my wife saw this comment, she would be at your front door
For as big as a move the markets are making, there is still no real volume and speed is not there, even the initial move down was orderly
time to start buying…I’m looking at GOOGL, FSLR, AMZN (bought NFLX calls)
FSLR / YELP / MMYT holding in ok at support. The market is starting to give way a bit below support though. Lots of action to watch. Good luck to you guys buying the dips
APOL short below 24.50 looks good
My largest position is SPY calls and I intend to double down at some point. Great opportunity is in our midst.
You then think “Good hell, what a weak bounce!” So you short into the hole. Dumbass. – Sounds like my process earlier this year!
Buying stocks as indices fall thru support levels make no sense. Good luck
Please come to my free trial, so I can change your elementary approach to trading. That mentality is why you’ll have to be content with being average.
+1
Sorry OA about my self pity post in a precious post, I will definitely get a yearly subscription along with the one I have for the 12631. I have learned so much these past 3 weeks, I know I will make money, and BTW $ZU just turned green !!!!
I can be a friend to you.
You are already (one sided as it may seem), trying to make it to the conference also
Exactly which indices have fallen thru support? My chart of the SPX, INDU, and NDX has us testing the July balance areas from before breaking out… still holding them too.
If you want to see broken support look at silver… big difference.
And Russell still uptrending since last summer… just been moving sideways forever now…
bought some ARWR calls, nov.
Just one thought to keep in mind since support is holding on a lot of these and people are buying: if support fails then the dip buyers here will add to supply. This is the first time in a while that it just feels like dip buying is a bad idea.
KNOW THIS EVERYONE. I AM COMPILING A LIST OF ALL YOUR LATE AND GREAT BEARISH ADVICE HERE TO PUBLISH AT A LATER DATE AT YOUR EXPENSE.
Just Remember: Kass is short the NQ.
Hasn’t Kass been short for years? I don’t know how he stays solvent. I’m sincerely impressed.
Yeah but just remember he nailed the March 2009 low. And the Feb 2009 low. And January 09. And Dec 2008. And Nov 2008. and…
So did everyone on StockTwits.
The beauty of being a writer like him is his audience has the memory of a gnat. At some point he will nail the top and sell it to newcomers that he nailed both the bottom and the top of this great bull market
If I called lows every other day I’d nail some as well
Exclude the rookies. They need to crash and learn. Why waste your time.
They can be saved. We lost a generation in the last few years to analysis that was irrelevant. Time to prep the future fund managers of tomorrow with more valuable shit than trendlines, MACDick, and moving averages.
True dat
let’s poll. if /es down another 10 today, will you be a buyer? not good. bulls are still strong !
A bounce is coming for sure. I still think we get a rally in the RUT back to the 1180 level before giving way to lower prices. But who really cares what our opinions are of the market? Just look for those setups that guys like OA is showing us. ZU has been holding up well. YELP and FSLR are still holding the $70ish/$67ish levels.
u left out FEYE. Another similar chart, including wday
everything is holding until broken. for those high betas, if the move will not kill you, the time will.
TRTC is the place to be
Up 10% since I noted that. Just sayin’
rates down, market down could there be a new correlation here…….
funny how smallish bio names have become the safe haven trade
RUT has some solid divergence over the past couple hours, let’s see if it continues that way.
Back, pulling the NQ order so I can manage it while in front of screens. Usually it works out that I should just leave it on!
The action in the VXN has me concerned more than anything
Although the Russell is quietly beginning to show the divergence OA has been talking about
Good eye, patna. Can you drop some lyrics on this divergence?
Ya once FEYE goes green
Check out ZU / YELP / LNKD…all holding in pretty well
SPWR hanging in there
Chuckle at some of the comments.
I see the large caps going down while the Russell has improved it’s lot a bit.
Stuff like TWTR and FB appear to be okay here.
OA – That custom oscillator of yours flashed a buy signal on /NG on 7/10 and again a couple of weeks later. What do you think of the action lately? Seems like a good risk/reward setup to me with a trade back up to $4.4ish.
Not a huge move but if you get it right UGAZ could rip 35% higher on that.
commencing liftoff . . . .
Is this the site where I buy Gold Coins?
LMFAO
Start with silver coins first
nope… it’s a bitcoin dispensary
Took on BHI Oct 67.50’s this morning, and TNA 68’s (10/3) just a few minutes ago. I think I’m getting a little better at this process, as the old me probably would have bought yesterday and sold today. Let’s see if there are any other buyers out there this afternoon.
OA
Does the pic refer to pain in the nuts symbolically 🙂
It’s a reminder that in this game, at times the hardest decision is the one where it feels like your nuts are in a vise.
in this game, they switch from a hot chick’s mouth to a vise so quickly. (and vice versa)
lollll….i wonder how many female members we have. Seems to be a good ol boys club
Ladies love cool Jeff.
Bought OCT calls in $BLOX.
When OA goes through the momo names tonight, looks like very little is down 3% or more
What do you think of BLOX OA? Nice little vol pocket above, seems easy to manage?
wtf this market is confusing as hell. Pretty much everything is down over 2.5 percent. This including our growth names we are using as an indicator. Might be a real correction coming after a bounce. but then again, WHO KNOWS!! OA- looking forward to your analysis tonite.
which month NFLX are you guys picking up? Seems pricey unless I go waayyyy out the money..
TSLA looks good here, pretty similar set up to NFLX
OA – Any thoughts on CVEO?
Are U Not Entertained?!
cue up Russel Crowe throwing shit at crowd.
nice bounce, missed my entry by 1 point, you win some you lose some!