I will readily admit I should have been a buyer and not a seller of what has certainly developed into a tradeable low. I speculated that it might be tradeable in another post, then later presented even more technicals pointing towards a low, and then did not buy as I did not feel the volume associated with the low was great enough. Allowing one errant variable to keep me out of the long side was stupid as the rest of the technicals were screaming a tradeable low.
However, if you’re like me, and sitting in a lot of cash, then I think it is prudent to wait before buying. Full Disclosure: I have 3 short positions and 2 long positions. By a very small margin I am net long.
The charts show why I think waiting is prudent.
 The chart above shows the DOW to be just beneath major resistance. Buying here means buying too late and buying high, unless you think we’ll V bottom out of this. Or maybe you like buying DOW 13,000? I think it gets sold there.
The SPY shows the same as the DOW. One good day’s rally and we’re bumping our heads on the 50 day. I am absolutely sure that level will meet with significant selling. Again, going long here is betting on a V bottom.
By far the most damaged of the indexes is the Nasdaq. Maybe it means it goes higher since it is farther below resistance. As I wrote in an earlier post, I don’t see it getting much past 2435.
Clearly, the indexes are just beneath resistance. To buy here means putting faith in a belief that resistance will fail on the first try. Rather than top tick it, I recommend waiting for any pullback as resistance is met, and then considering buying in. Keep in mind that last week was the market’s best week in 5 years. What are the chances it puts in a repeat performance this week? Of course it could, but since the market is generally a combination of give and take, I think this week we’ll see some taking, again.Â
It’s starting to look like August 16th all over again. But yeah I agree, I wouldn’t plan to rush in if you have lots o’ cash.
Good charts. I’m opening with crm, bidu and ugly shoes short. Coul dnot cover the bidu on fri, but it’s small position. Bidu might play me, and not as enthusiastic about the china shorts today. Bunch of micro minis long. Gonna watch Wendy to decide if shorting it for the afterhour numbers.
Wood,
What happened to the definition of a trend?
Lower highs, lower lows.
That’s what’s currently on offer.
jog
Duc, not actually.
The 10 day moving average is lower than the 20 which is lower than the 50 which is lower than the 200.
That means DOWN.
So, the last 9 days have been countertrend. That’s nothing compared to the last 3 months.
Also, there has not been any sort of move down to test the low yet. Thus, no way to measure lower highs, or lower lows, unless you are now using one day moves to establish a trend.
*Owned*
Wood,
Disagree.
Nothing to do with moving averages.
This is based on price [candles/bars]
jog
For your info Shed, my trades today were:
Bought MSFT at $30.54, FTK at $21.78, and FXP in the mid-80’s. Love trading that FXP.
Sold half my QID, which I might regret later. Sold my OMTR at $27.61 for a nice trade. I’ll be trading OMTR again I’m sure.
If any of you manly men follow my advice or trades, the little girl down the street will punch your mustache off and you may lose money.
Congrats to the Giants fans!
Boca, I shorted KRE this morning, as planned from my Time To Sell The Banks post over the weekend. Its in the money.
Did you notice the analysts read my post and then issued their downgrades?
Your call to sell the banks was very timely indeed, props to you.
I still have most of my financial puts, which I hope will set up into a nice trade over the next several weeks.