we have my sort of "double Top"... now it is a bit of a Lower low. This whole pattern doesn't show an "Ascending Pattern" and it's more Wedge like form, We did break down past my orange line, but ... We aren't out of the "Ascending pattern till we get past the pink line there, nor are we out of the Trade Channel. Since the "Top" last friday, sentiment seems to be on the decline.
I creeped myself out solidly after the market, feeling that shorting was a mistake... so that is a good thing, sentiment wise.
the bear flag... well it's not all that good a sign for a Huge Correction here... and could hint that we are "Range bound"... so trading the emotions of the market, and that when we get the Boogyman, solidly... it may be good to keep your swings tight..
I didn't hear people talking Correction or sell off today, So.. the shorts arn't out of the woods yet.... and we could easily be "Range Bound"
Monday, April 27, 2009
ok... some stuff
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Here's the thing about T.Lo and her recommendations. Initially she had been saying that the buy signal would need to wait until the OEX hit 495, the October high, which I understood.
Due to the extreme oversold condition in March as shown by the objective sentiment indicators, however, she and Pete made the call to get back in. This was a pure sentiment call since the technicals and fundamentals still sucked.
Now, the sentiment is no longer bullish and the market is no longer steeply oversold. We are still 20% away from her OEX target and technically hitting resistance. In fact, it looks like we are completing a lower high and beginning to roll over.
I understand the principle of hedging the long positions and I can figure out the mechanics of setting them up, but it seems like it makes better sense to go back to the sidelines at this point.
Perhaps we are range-bound, in which case cash would not be a bad thing until the market declares itself. Perhaps we are rolling over, in which case cash would be a great move. The chances that this thing breaks out above 87 in a bullish technical move seems like the least likely.
The risk-reward is decidedly different than it was 6 or 7 weeks ago. Sell down to your sleeping point, indeed.
to be purely technical...
the suggestion would be:
Range bound to say 820 820... Which is to say probably hit 820 bounce to 870 retrace 50% then move higher to 1000spx.
Or just a pull back to 790 or 770...
It seems obvious to me, that the pull back is just a technical move, but the sickness thing seems as good a reason as any. That and to panic some of the Late Adopters, and make them earn their money.
You see a larger pull back, which I doubt. But Also, I think we move to 1000 then have the good Aversion phase, at which point we will retest this level again... in fact I bet where ever this pull back goes to will be where aversion goes to in the fall.
You are fairly nimble, and don't have much problem moving in and out.... so I don't see anything wrong with it... and even if you move back in at the 900 level if we go higher...
but still... we just don't quite know...
I get where you are coming from.. always the chance we are wrong and we just go to the moon....(I say with a chuckle... but I laughed at the crash too...)
The OEX 495 was *not* a buy stop. It was the last big blue dot on the weekly volatility cluster where one is supposed to take off the hedge.
The call to get back in for for those who were out of the market. And since there were no new blue dots, the call could be used to remove the hedge as well.
WOW.....
I sort of see this stuff as sentiment, where we are all still nervous and it shows that the market has upside still.
Tony's concern is that we are moving into aversion phase, and that we may get some kind of Double bottom.
I've been wondering for a while about how much Post Traumatic stress we would experience after that Crash... I think it's taken it's toll on everyone..
I look back on the rollercoaster of early last year.. as days of Running through the Daisies...
Geez, Eric, you get some really important commenters on occasion... which helps to make up for all the electronic drool I seem to slobber all over your site! Impressive.
Believe it or not, I did understand all that blue dot OEX stuff. To be clear, I have two piles: one I invest and one I trade.
The invested stuff is not that nimble and went long per the Invivo/ Fidelity allocation about six weeks ago. ($$ Thank you very much, T.Lo and Pete, btw. $$)
The trading pile is indeed more nimble. I also see a range between 825 and 875, so for that allotment I have a mix of shorts and longs set up as swing trades, but could see my way clear to go to cash in the trading account and play a little golf if the weather were better. Actually, I'll probably just set some Invivo stops and watch The View since it's due to rain here tomorrow.
Thanks again. (I'll be quiet now.)
the real fool is the one who doesn't open up the discussion, and choses to stay ignorant.. and quite...
I tend to spend time between that and, a journey of self discovery... as I can learn things... but don't quite learn it till I live it...
Just a weird note, I'm having a weird thing with We right now... Never quite sure who 'We' are, or how out of turn I am when I talk of We or us.... or they...
seems like a temporal psychological thing...
It's called "pluralis majestatis", ie, the royal "we":
http://www.answers.com/topic/pluralis-majestatis
It has an association with hemophilia, I think.
maybe I have swine flu
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