I’m glad that I’m still on break (not having traded for a few days now). Looks like I picked the right time.
We saw a classic WTF pattern yesterday. If you don’t know what those are, they frequent occur during the last hour, half-hour, or 15-mins of the trading day and come in the form of a HUGE spike. It is a sudden and massive reversal. If you get caught on the other side, then you know immediately, without a doubt, that you are screwed. Whatever gains you had get wiped out instantly and you get closer to taking a loss each second you sit there bewildered by how things, such as hot air from the government, could totally ruin your trading day.
You know what I’m talking about. We’ve all seen this pattern too many times last year. It appears to have resurfaced like some kind of trader-hating virus bend on taxing your ass. Clearly, both bulls and bears had a difficult time today.
I signaled caution to traders that yesterday was not a good day to trade. I was actually cautious the whole week, unable to find decent opportunities. Sometimes, you do very well just sitting around reading your (currently) favorite book, “Trade with Passion and Purpose” by Mark Whistler (Wiley, 2007), while avoiding a huge mess. Also, a shout-out to Lauren over at Wiley today for hooking me up with a complimentary copy of “When Giants Fall” by Michael J. Panzner (Wiley, 2009). You can read his blog over at Financial Armageddon. I will be reviewing both books.
Once again, I encourage you to practice some caution. Don’t forget that the market is closed on Monday, so plan according. I say “caution”, because the market is “boxed in” once again. We have major support at 805-815 (as witnessed). This is in addition to the already tested 820 level. We are currently ar 835. The 20-day MA is 838 while the 30-day MA is at 854. In between these two MA’s, we have 850, which is an important psychological area. You might want to lighten up on your position sizes and take less risk until a clear direction is determined.
Here’s what happened (besides the massive short squeeze): we formed a falling wedge over the past 3 days. Then, we bounced off of the lower bollinger band at 808 almost perfectly. I have no idea what happens from here. The government can come out at any time to announce whatever they want to announce. Don’t trade if you don’t have the upper edge.
1-day SPX
3-day SPX
10-day SPX
40-day SPX
4-month SPX
Naturally I voted for Bill Miller out of principal.
*principle
Unless you were referring to Victoria Principal for some odd reason.
mmm…Pam Ewing…
Cool postings. I’m pissed I missed it, an 800 spike is a rerun. Range trading near a bottom is easy market milking. We run to safety away from the edge, sell down cuz down is correct, so turn on a dime. The down run in one day got the most big hands and least small in on the profits, and profit taking makes a nice start for another hobble up to friday, keep the sheep coming. Ultimately I think the goal is just to hump the 50MA flat to down and not have a global finance seizure like we nearly got last fall with fund withdrawals.
11 months to 50%, it’s amazing anything works at all.
CA:
It’s my understanding that when you have blatant market manipulation by “leaks” to Reuters (which happened Tuesday) you add premarket, market, and AH candles. In that case you always get what’s called a slap-chop doji, regardless of the pattern/tails.
http://www.youtube.com/watch?v=rUbWjIKxrrs
If it is caused by CNBC, it’s called a Gasperino doji.
In either case, confirm price direction at the next open or preferably stay in cash.
OK how about judo chop Cramer in the throat and dick smack Paris Hilton in the face.
Dpeezy nice pic!! Pay attention young ladies, that’s what REAL tits look like, not the jelly filled abominations our generation has to endure.. Take notes..
I like Goldie’s idea
M- I hate these doji!
OH come on, leave Pelosi alone
Here is how you remember the difference.
The PrinciPAL is your pal.
looking at a 5 day 15 minute chart….
there was a 3 fan line break with a throw under on the late afternoon test of the AM lows..the retest was on lighter volume followed by volume expansion to the upside…trade was to buy in the low 21’s with a tight stop and hold for the ride…….
I’m still not doing shit.
AMGN on the next flip up for me for the nice ride too. Have a great weekend and Happy Trading!
Line ’em up and get slap happy.
SORRY i AM USING THE sso’S TO TRADE THE spy CHART….
Another WTF pattern. This time, it was at the very last second ROFL.
I didn’t trade a single stock today, for good reason.
I slapped Ken Lewis.
I’m guessing that it was ‘personal’ for many of the people who answered in the poll.
Hateful.
The people voting for Paris Hilton obviously want to smack her on the ass.
Paris Hilton=Donkey Punch
I screwed up my vote. I did not see Nancy Pelosi on the list, before I chose Bush, otherwise I would most definitely have voted for Pelosi.
Hi John!
Here’s what I think about the Short sell entry price on TEVA—45.9
I want to re-vote, this time for Pelosi.
This damn stimulus bill…fuck her.