This market is into distribution. I am like Atlanta, a hub for connecting sellers with buyers. Only unlike Atlanta, my primary purpose for many days has been to stand put and be distributed on. 2/3 of the stands I make, joining the ranks of other scarred faces and forming a scrum, result in a geyser of distribution blowing me over.
Today’s wipeouts were YELP and AMZN.
Delta on today’s down move in the Nasdaq was the lowest I have seen. What this market feels like, literally since the opening throws of The BABA, is someone trying to sell without spooking the market. The problem is no matter how and where they sell, prices still move lower. Imagine you had an inventory of a few 100,000 futures contracts as a variety of stocks. You made a fortune during the glory years of QE and with all these Chinese internet companies and political happenings you want out. So you begin selling, the market goes lower. It comes back up, you sell into it, and it falls lower. You try selling pre market and it goes lower. You try selling at the open and it goes lower. You try selling at 3:30pm and it goes lower. You don’t want it to go lower but every action you take makes prices head lower.
That is how the market feels. Like someone who doesn’t want lower prices can’t help but push price lower by their actions. Soon they may panic.
The afternoon breakdown marks a neutral extreme day, which is a high conviction directional close favoring the shorts. It also cut deep into the deep V bounce on Thursday. This truly was a ‘turnaround Tuesday’ for the bears who are flexing their firm grasp of the intermediate term timeframe.
I have little advice except to stay small if you play the long side and keep your risk defined. It is hard to short the hole down here but it is looking like it will work out in the short term. If you are keeping your position size in line then a winner should be good for three or four losers.
Stay thirsty, stay humble, and keep taking your trading pictures.
If you enjoy the content at iBankCoin, please follow us on Twitter
Let it be known, also, that a market movement in itself cannot be ugly. This is a skewed perception, fwiw. However, there is no doubt the Buick Grand National is stupid fast and ugly
Raul,
Any car that’s stupid fast cannot be ugly.
I would argue with the 1985 Mustang GT 5.0. It’s on my top 3 fugly list.
‘Merica
nailed it
It’s an R Kelly market. Who you gonna be? The mask wearing rapper or the underage girl getting pee’d on?
Spot on with the GN. Rednecks getting a taste of the forbidden fruit….the turbo.
GN or iroc Camaro is my vote.
I want to be the pee, if that makes sense. this is a very fluid situation