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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

Up 1/29/21

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

? 3/26/21

Sub-Intermediate

Up 3/29/21

?- 4/5/21

? 4/1/21

Short term

Up 4/1/21

Up 4/5/21

Up 4/1/21


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Thursday, November 8, 2012

Daily update 11/8

We had a nice early bounce to short this morning.  I hope some of you took advantage of it.  Here is the daily SPX chart.


I have changed the green support lines to red.  They should be resistance now that they have been clearly broken.  It looks like price might be starting to form a down trend channel.  I have added some blue lines for that.  We ended the day near the lower line.  We have last year's high at 1370, the 200 EMA at 1375, and the 200 SMA at 1380 for possible support here.  The price bar is blue indicating we closed below the lower Bollinger band.  Price is extended.  Lets zoom in to the 130 minute SPY chart.


We have a blue bar on this time frame also.  Curiously the VIX was actually down today.  That indicates to me that people were busy liquidating long positions instead of hedging them.  With price extended, at the lower channel line, and in a support area I took profits on my swing short at the close.  I am hoping we don't have a big gap down tomorrow!  If we do, I might be tempted to buy it for a day trade.  That would depend on what is going on at the open, but there could be some shorts taking profits.  A gap up in the morning will likely fade into a retest of today's low.  We will have to wait and see if the bulls show up to support the market here.  There is no law that says they must do so.  We could continue the cascade down. 

The tricky part here involves margin calls.  If we have come down enough for them to start going out we probably only have a two day window for upside.  In that scenario, there will probably be a bunch of trapped longs hoping and praying for higher prices to sell into to raise the cash.  I have no way of knowing what the status of that is except what I hear on TV.  That is the disadvantage of being a lone rogue trader with no Wall Street connections, LOL.  Some of you might have more news in that area then I do.  Please email me if you have any juicy bits of info. 

The continuation down today lends support to my idea that yesterday was a break away gap to the downside.  Given the overall top formation I have been talking about for months, I suspect yesterday was every bit as important on the down side as 3/10/09 was on the upside.  Please do not feed the market your hard earned money.  This is especially true if you do not short.  Cash is a position.  When we get to the next cyclical bull market (estimated 12-18 months) I will show you a way to make a lot of money.  You have to have cash to deploy that you don't need for a couple of years.  If you lose it all on the way down you won't be able to take advantage.  Anybody buying here is not getting a deal.  Stocks are on sale, but the sale is going to get a lot bigger.

Bob

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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.