So, my current allocation is 22% long/10% short/RIC. Nothing special, I know that. I didn’t remove my existing shorts, but I plopped on double the longs at the open. There will be a point where I do go massively short, for only 2 days, and that will come very soon. This is to catch the top end of the spike for a quick double-digits, and then, who knows what happens? We could head higher or lower, I simply do not know what will happen. If you missed the entire rally and are planning to go long tomorrow for a swing, then you might be better off waiting for a major pullback – just a thought. You do not have any buffer to protect yourself against one up here.
As for the short signal, for a 2-day short spike play, I need to see a number of reversal candles, such as doji, hammers, shooting stars, black-filled bearish gap ups, dark cloud covers, etc., combined with resistance at a MA such as the 20- or 30-day, and short-term technical overbought levels. Combine these three, and the short-side Spiker™ is highly successful when nearly all components of the sector exhibit similarities. It’s obvious which sector best qualifies (hint: you make deposits in these).
On bottoms – bear market bottoms are carved out over a lengthy period of time. It is proper to assume that this is another bear rally, until it isn’t. On a technical level, a bear market is over when the market is able to breakout above and stay above the 200-day MA, which is over 335 pts on the SPX. On the short-term, there will be significant resistance at 745-750, which is the location of the November lows, and the 20-day MA. Depending on what happens at this pivot point, we could head much higher, or make a new low. Right now, enjoy the long side and I’ll alert you to the day to short the Spikers™.
Near-term resistance is at the green lines drawn on the 10-day chart. The red line is the 10-day MA.
On a personal note, I adopted a black lab puppy, and will be giving it away in the morning to a trusted friend. He is TOO MUCH WORK, but it was fun while it lasted.
Damn you for not putting white charts up.
Thanks. Nice to see strength, want to see rips and slips, run all around. The sell off was so slow that the major ma are surprisingly close, maybe catchable and provide support. It’s all in bigs’ hands to rerun the sludge tick dump or no, but it is telling that it was so slow, they probably want to get back to the WTF dayz asap
The key will be 740 on the test. If 740 becomes resistance, then it’s a different game altogether. A failure there might produce a fairly rapid decline to the 600’s (or lower).
CA – Yes, puppies are like kids, a lot of work. You can teach the kids to do the dishes and take out the trash. Puppies not so much.
I’m getting in and out as quickly as possible, with only 1/3 of my trading account.
Holding my longs in my IRA longer, but have to sit on my hands (no hand cuffs, LOL) to do even that. I went from holding too long to learning how to take the proceeds and run.
Labs are the most amount of work in dogs, and it never ends. Next time get a cat.
The end of today will determine whether I load up on longs or load up on shorts.
What are you looking for CA , at the end of the day.
I just reversed my aapl LONG to short, but i would like to know what you see.
Well, for long, I want to see a continuation of a build-up of this flag without a breakdown.
For a short, I want to see all the stuff written in paragraph 2.
Thanks CA,
Hopefully next time when you do have time clarify on this
“hammers, shooting stars, black-filled bearish gap ups, dark cloud covers”.
Hopefully short setup is there. Let me be early for once.
Carey —
Keep an eye on UUP for the dollar’s moves here. Very strong selling yesterday and it looks like its going to roll over again right now.
That wouldn’t be good for the shorts, IMHO.
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