If we are near a bottom then the first rally always fails. It’s part of the discouragement process.
Since im not sensing much discouragement out there, I’m thinking we’re not done moving lower.
Don’t let higher prices lure you in. Rather, wait for that crowd to buy up and bet against them. The objective here is to initiate from lower, not higher.
To my After Hours with Option Addict club, we’re going to experiment with meeting DURING market hours this week starting tomorrow. There will be no meeting today, but starting tomorrow you’ll be able to trade with me from market open til around the lunch hour. This will go on for the remainder of the week.
I will post a link and password on the After Hours blog later today that will work tomorrow morning.
OA
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sweet with the morning session OA that sounds great!
I like that idea
OA, the on thing I’m a bit torn about is whether this is a “Buy the Dip” moment, or if we just we just went through Panic and are now beginning Discouragement. Obviously, your post mentioned Discouragement, but could you provide me with some insight as to why you see this as more of a Discouragement phase vs. Buy the Dip? Thanks in advance.
the buy the dip is on a much longer timeframe
I see distribution. TLT is up on above average volume.
Always appreciate the insight, OA.
I’m with you on this one. Think the big volume buyers are waiting for some blood. Patience is always rewarded.
Been seeing a lot of traders saying wait. Makes me wonder if we don’t move higher first and put in a higher low somewhere around here.
Not sure how many of you guys were trading back then but in Oct 1997 there was a nasty 1 or two day decline that caught a lot of people off guard. The market rallied pretty hard the next day or two and put in a higher low a good deal higher. I just wonder if we have been conditioned to this retest of the lows action and we don’t get it, instead we get a higher low that’s not that close to the lows.
gotta admit tho, the IBB held/rejected 240 pretty well
biotechs are the true leaders imho..they bottom first
Wow quite a move for XBI
Personal opinion is IBB takes out 240 first but trades back. XBI did some damage yesterday on high volume. But who knows if thats the puke or just the beginning
All my positions except FTK are still looking ok. Calm before the storm? Anyone still own FTK ?
Strong close today. Expect a move higher tomorrow to pressure shorts to cover.
I don’t understand “the first rally always fails.” Aren’t there “buy the dip” rallies where the recovery is more or less a V and others with complex bottoms and recoveries? Vee rallies would include the lows of Jan 2014, Oct 2014, and the lesser drops in Jul 2015 and May 2016. Rallies from complex bottoms would include Sep 2015 and Jan 2016.
I really like your model of how bottoms form and recover but I think there is a second class of bottoms – Vs. Would be really interesting to compare the two and identify markers for each.
Check your time scales. This is only day 3 of the current downtrend, the first upday.
How often do we have the following scenario:
1) Two back-to-back high-volume, high-percentage, down days
2) a large upday (on substantailly lower volume, I may add)
3) no subsequent tests of the previous recent low
Look really closely at each of those times you’ve referenced. There was a failed move up in each of them before we pushed higher. Even V reversals are a multiday process.
Out NQ 4283 +97
nice
Nice one.
Great idea with the morning session! Lately haven’t been able to make the afternoons live
low volume & holiday trading.
if we get a let higher or lower I doubt it comes before 4th of July
People have got to determine what time frame they’re trading and what works best for them. What looks like a downtrend to a short term trader is a pullback to a longer term position trader. That said, the trading range in SPY from Apr 20 to Brexit day looks like distribution—and somewhat similar to the 11/04/15 to 01/04/16 distribution. Caveat emptor.
Let’s see if this rally fails to get folks discouraged. Looking to buy the next dip.
What does that mean?
Not much. Just not that confident this (today’s) rally holds. I prob sold my 3x longs too early at the end of yesterday but will be patient to get back in instead of chasing today.
Who knows. Maybe that’s what all the novices are thinking and I don’t get another shot at it. But I just wouldn’t feel right if I bought right here
Rally fails to get people discouraged? Uh… don’t know where to begin on that one.
It was a retarded way to try and comment against what I wrote I suppose.