I had reason to suspect that we’d get a positive close today.
I think my point was valid. I know it is. Hell, it’s valid for tomorrow too.
But look what I just said. Reason. Valid. Know it is.
Leave your reasons and subjectivity at home, and pay attention to the math.
My Breadth Indicator was clearly negative. I emphasized that. Don’t lose the forest for the trees if price action and suppositions call for a 1 to infinity point bounce but the sophisticated tool I use to measure market health is poor.
You want to be on the right side of the trades, follow my breadth indicator. It’s outsmarted every prognosticator, from the getting in on the February rally, to getting out at the end of April, before the flash crash, to not even buying the dip for a bounce until we actually had one for a week or so.
That’s pretty fucking excellent if you ask me, which is why I give so much credence to its readings, more than “what I think.” Once you realize “what you think” is subjective and a guess, you will feel more comfortable “trusting” a finely tuned empirical measurement of the market’s health.
One more point…there’s nothing wrong with guessing or supposing. What I think it wrong is betting on such suppositions. Even though I felt a bounce would come, I didn’t bet that one would materialize, I merely expected it. That’s the difference between losing money and being wrong.
9 Responses to A Quick Point…
I should add that im still in my two longs, and they actually both went up 1-2% today.
THAT is pretty surprising.
hey Danny what type of metrics or criteria do you use to find your rip or explodes ?/
buy strength I assume but what else ?/
I have a scan that I use that usually gives me 40-100 candidates, then I hand pick the best ones.
the main idea is the pattern. note the patterns.
its an up move –> consolidation –> up move type of things where you want in after the last consolidation.
so you have a screener that screens for patterns?
I use finfiz and look for good patterns of strong stocks
what filters do you use to find the stocks then?
I use a program called stockfinder that I highly recommend.
That’s the program I use to generate my fancy charts.
I programmed a code that searches for stocks that are strong but resting in their uptrend. then I enter on a breakout.
I can’t get much more specific that that, as I am unwilling to share my code.
Instead of focusing on picks as so many traders/bloggers do, I’ve decided to focus on WHEN IS THE BEST TIME TO TRADE the picks. For almost all momo/breakout types of trades, you want bullish breadth, so that’s what I focus on and share.
I was kinda looking for a bounce today too, and that midday upturn suckered me into adding a little to my SPY calls. Now I’m wondering if we retest the ~1040 low before another upturn. What are your thoughts, and what does your breadth indicator show for tomorrow?
breadth is still negative, as it has been since Wednesday
we can bounce at 1040, sure, but that would be the third time. Third time’s usually a failure when a major support/resistance is tested.
More likely, we would close positive tomorrow due to 4 days in a row lower. Besides that, though, daily price action, weekly price action, and breadth are all negative so when it comes to longs…
There is significantly more risk to owning longs here than if the we had bullish price action and breadth.
To quote another commenter in another realm – fuck the unwashed. Some in that category do not understand the term “negative”. Perhaps you should use green and red in text (?). All of your posts are on target with regard to buy/sell pressure, and let them swing trade themselves into the negative if they wish.
Truth MS, truth