Believe me, I am on these charts looking for responsive sellers too. We started showing signs of finding one yesterday, but we also had a firm grasp of the third reaction, remember? There was a strong rotation down today, and it fizzled away, poof. There was a moment today where you could have a short bias, it came and went by 11am. There are few signals better than a failed hypothesis, IMO. It reveals the other side.
It is hard to initiate fresh index risk up here, which is why you hunt out a chart that is still basing along or not too far from the launch zone. When the long and intermediate term trend are up, you have to be nimble on the short side. You can be a short seller in this tape, I have seen it with my own eyes. But you need to wait for the big sellers to show up.
Momentum pockets are narrow and not every stock is a winner by any means. The market structure is overheating. There are still losers everywhere, especially if you dabble in the dark arts of short term duration. Twitter found a responsive bid today, about a buck before I wanted to add a slice. Eager buyers front ran my logical level and I could not chase. I bought FB yesterday afternoon based on 3rd reaction analysis and that was a dud, I cut the loss early.
I am not crushing right now, mind you, I am nearing where I left off before the great OPEX rout of 2014. Playing it old school, with these common stock positions son. I am trading well though. I traded well through the selling too but my teeth still were kicked in, it’s the nature of speculating.
Accept it, tie risk to every single trade you make. If I put you on the spot, right here right now, and ask you where trade XYZ is wrong, I expect an answer mother fucker. That is step one, put down the opium pipe and face the risk profile you have established. When you lay all the numbers out you might not like what could happen in the event of a goose hunt.
Know you risk, know you risk, knowyourisk.com
If it didn’t matter I wouldn’t annoy you all with it.
It is a pillar, you will lean on it, and it will give you confidence to engage these markets.
As for hoping the lack of Fed intervention will lead to another rug pull, they’re still intervening just in bigger and quieter ways. You don’t take the training wheels off the bike and then push the child into the road, you run alongside them whilest smoking cannabis.
I see the markets broke as I was penning this piece, very well, I must return my attention to work.
On a lighter note, Michigan is dreary about this time. If your land is also becoming dark and cold, why not join me for a few cocks and laughs at the First Annual iBankCoin Investor Conference? We can discuss auction theory live in person via aggressive hand gesturing. A true break from the click clack of the keyboard, yes?
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Raul, note that just now we hit the same price level in RUT that saw the strong seller / failed auction during the BABA IPO of 9/19. I suspect a pullback is very near.
nearing the level in the /NQ as well
Great post
gracias
no joke, I’m getting slightly better at cutting trades going wrong which is tougher than it sounds isn’t it. You don’t want to spook out of a move on a fake out, but neither hold stubbornly/dumbly. So the when to cut analysis is a tougher one. Easier with common stock vs. options.
awesome to here, a long running bull will start to reward anyone who takes risk, bad conditioning, IMO, we need to have setups we trade and be nimble to cut them when they fall apart instead of simply re justifying them as some new setup. take the loss, clear the deck and the mind, and if you want to take another poke at the same instrument, go ahead. The only rule I have is the old three strikes and you are out because its likely I am fighting the market. Plus, it forces me to really make that third attempt count, I love rules
Yes, well said.
Yep, another one to paste on the wall..
humbled, this wall you speak of must be egregious