Monday, September 28, 2009
September 28th, 2009
FYI, right now the equities or stocks, oil and spot gold are in a pullback, not a correction. It seems like all 3 of them are correlated to each other. If I am expecting spot gold to break all-time high on the horizon, then equities and oil will follow. Then U.S. Dollar currency will go down farther. The premarket action is pointing up in the morning. I am expecting to close the morning gap and retest the Friday intraday low. If the market breaks the Friday's low, stay short. Otherwise, if the market bounces of the low or morning gap and heading back up and higher than its opened, it is time to close our short positions.
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I agree with gcl's assessment of market
ReplyDeleteNow that the first half hour is over with, what do you think QQQQ or SPY will do? Since Iran was test firing this weekend, I believed the price of oil would go up. Obviously it didn't. In the past, when oil went up, stock prices went down. This year, they go up or down with each other.
ReplyDeleteThe market is retracing some levels back up. There are few known stocks didn't participate with the rally. I am very suspect with this retracement.
ReplyDeleteIf SPY retraces back up to 106.50 area, short at this level. This is where it broke down last Wednesday.
ReplyDeleteOnce again, I agree. I am going to short a small position in SnP here at 106 and add if we get to 106.5 (via SDS)
ReplyDeleteHello Gcl and JDT,
ReplyDeleteMy thoughts seem to conflict with your proposed actions today. I am comparing today's volume which is running 40% below with the volume on last three days. Which makes me think not too many believe this rally has legs. Uncommitted volume will come in later to to take this rally even higher at that point it is wise to short. My preference for shorting is after long green volume bar, but today's volume looks like we are not there yet.
Today is Yom Kippur Jewish holiday, so dont expect high volume...
ReplyDeleteS Mantra, you may be correct. This is a day trade for me and I will exit the trade today at some point (profit or loss). And my position is small as I have no real conviction either way. My concern with of a potentially stronger rally has everything to do with end of quarter window dressing and little else.
ReplyDeleteIs today a "dead cat bounce" or another rally from here? I am looking at how it will close today.
ReplyDeleteIt seemed like SPY had hit its high for today at 106.47 around 12:10 PM. It is slowly about to turn over.
ReplyDeleteWell, gcl, I have placed my little bet. Let's see how they close'em!
ReplyDeleteWow, the dollar is about to hit new highs for the day. I do not see market rallying too hard if dollar can hold at this level or higher.
ReplyDeleteGold stocks had reversed back down. The rest will soon follow.
ReplyDeleteJDT, what kind of little bet did you make?
ReplyDeleteNow it is the time for daytraders and specialists exchanging hands back and forth.
ReplyDeleteI read a book called "Trading on Volume" by Donald Cassidy, a must read for traders and investors alike. It explains how to identify behaviour by looking at the volume. It tells as long as the volume is not excited, the direction of market could continue. That was the basis for my earlier thoughts this morning.
ReplyDeleteI believe right away that the specialists planned this earlier this morning. They discussed this in the premarket. They have to unload their shares at the higher prices.
ReplyDeleteOver the weekend I read the first 5 chapters of "Wall Street:Meat". The book is based on real life as market analyst doing the buy and sell recommendations to the public.
gcl, i am holding a small position in SDS (re: my little bet)
ReplyDeleteI guess the first attempt to hit 106.50 area for SPY failed. Then the specialists tried again to hit 106.50 area.
ReplyDeleteSo, gold rolled over, oil rolled over, but the market is stable. Window dressing or end of day sell off??
ReplyDeleteIf SPY break below 106.15, we might see end of day sell off.
ReplyDeletegcl, i have some questions
ReplyDeleteusually i put 10% as stop loss.
If i will use mental stop, sometimes the price can drop 10 percent and if i wait it can drop even more intrday and i can lose alot of money.
i do you use your mental stop ?
what stop loss u use for different stop prces (1-10, 10-50)
any recommended guidelines
The asian markets are in pullback, and it seems that the us and europe market just ignore the asian markets.
ReplyDeleteusually all the markets moves similar.
any explanation for that ?
This has been the behaviour for quite some time...
ReplyDeleteGCL,
if close around the current levels, are you holding your shorts into tomorrow?
thanks
Shulin, it is hard to follow U.S. market alone. I don't usually follow European and Asia Markets because I don't know the news over there.
ReplyDeleteOther investors put in 10% limit loss. Some investors follow a guideline of 7 to 8% loss. I don't usually have percentage limit loss. If SPY or QQQQ break key resistance or support level, then I get out. For example, last week, I got out when SPY broke down 106.50 area on Wednesday. Whatever the stock prices are, I got out.
I believe SPY will trade back down to 105ish. SPY didn't spend too much time in that area. Last week, SPY spend most of the time in 106ish. It is 105ish area time soon.
ReplyDeleteSelling all positions when SPY broke down is very prudent strategy. Here is a fact you do not hear on TV everyday, 75% of a stocks move is dependent on the direction of the overall market. If markets are going up, your stock will most likely go up too, no matter what the underlying fundamentals. Just goes to show you it is a rigged game.
ReplyDeleteJust closed my SDS position.
ReplyDeleteRemember all these times, I mentioned that if the market opened a gap up or down and if it gained or fell more than 100 points by 10:00 AM, it will close more than 100 points. Today is the case.
ReplyDeleteYes, I still have my short positions on AMZN, CLF and GOLD. GOLD is treated me very nice profit. Almost CLF gained washout my AMZN loss. I am expecting SPY will fall back down to 105ish area soon.