PREPPING MY NEXT MEAL

If you didn’t catch my response to the last post I did, here was my answer:

Write this down for future market volatility/corrections.

“If you test early, you test often.”

Both in 2015 and 2011 the Monday move consolidated for about 4 days. 7 days after that consolidation the 2011 analogue was testing lows, 2015 was testing highs. You can see a small trend develop higher in 2015 that is not present in 2011.

The fact that 2011 was quickly back to lows meant that prices would act around those levels and were more comfortable with them. The more touches you get from lows, the more likely they’ll break.

1998 had an identical move up in said time frames.

Hope this was helpful.
OA

Judging on the responses I got from that, I won’t ever do something like that again. lol.

My watchlist is like a pair of pocket aces for next week. I think you’ll see the markets try to consolidate this extreme run a little bit by flattening out and working off the overbought signals. You know what that means, right?

Everyone is looking for alpha. Everyone was light at the lows and wants action. Next week you ought to see individual stocks make some impressive moves. You ought to target the cybersecurity space and some software names that haven’t participated in this rally.

“Why would I want to participate in stocks that aren’t moving OA? Doesn’t that mean that if they were unable to go up in this environment, that they will want to come down?”

The fact that you are asking that is exactly why these stocks tend to surprise and create explosive breakouts. They are non responsive in bullish environments enough to go noticed, and enough for you to ditch the position and stop watching.

Anytime you can find a place or a theme that participants are taking their eyes off, is a perfect place to position.

More later,

OA

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