As I detailed in one of my posts yesterday, the market has a knack for turning the expected into the unexpected. After several quarters of the market climbing a wall of worry on low volume, technically shaky bounces after sharp corrections, many traders went on tilt and shrugged off the idea of shorting in the face of a bearish setup. I believe the crucial difference now is that within the past few weeks we have regained many or all of the losses from the 2008 crash. The wall of worry became awfully slippery the higher up we went.
This time around, bears and heavy cash holders have been rewarded with a market that was set up technically very bearish, and followed through accordingly with price action and volume. As I am writing this, the $SPX Is off 2.28% at 1131, as we have lost several key levels of support. Because of the ferocious nature of the selling since 2 p.m. yesterday, I have not had a chance to add to my 1/3 positions in my three inverse ETF holdings–$SKF, $SDS and $TZA.
The 30 Minute chart of the $SPX indicates that we may have more room to fall from here.
Look for possible support at the 150 day moving average at 1124, as well as the 200 day m.a. at 1100.
The Euro also remains under pressure, and if it cannot catch a bid here, it looks as though it will fall back to where it was at its inception. Here is the monthly chart.
Eventually, we will see actionable swing trading setups on the long side. For now, however, many charts are either broken or are in the process of breaking down. Thus, resisting the urge to bottom pick is important. Likewise, given how much selling we have seen in the past twenty hours, initiating or adding to short positions is probably not a good idea at this point.
Hence, patience and a heavy cash position reign supreme.
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bless you for intraday thoughts and advice
my pleasure
Great advice once again. I bought into TZA yesterday (largely b/c of your post). I wanted to add more but will err on the side of caution. Thanks!
Sounds good. Thanks for reading, as always.
Nice job as always.
Thanks Yogs!!
Thanks,
These intraday posts really help me as I can only trade my mutual funds at the end of the day for the next day.
Perfect
A solid start to your blogging position at the most egregiously supreme market community. Keep it up mate.
cheers, mate
I never got a chance to mention it but your ‘On Tilt’ article was most excellent.
Hopefully we get a big move up or down on Monday so I can fade the move.
Looking at 1-2 day setups only – that and collecting time/premiums on core option sales are about all I deal with in this market.
I never got a chance to mention it but your ‘On Tilt’ article was most excellent.
Hopefully we get a big move up or down on Monday so I can fade the move.
Looking at 1-2 day setups only – that and collecting time/premiums on core option sales are about all I deal with in this market
Thanks, bro. I agree with you on that strategy.