Friday, May 18, 2012

Face Ripper?

Are we gonna get a face ripping rally with the FB IPO?

Fat Chance.  It is not common to get a week long accelerating selloff that doesn't bounce at all by options expiration Friday.  In the rare times that it does happen (e.g., January 18, 2008), it is a sign of huge selling pressure and lower prices.  We ended up gapping down huge the following week.  Aside from the October 2008 selloff, the selloff in January 2008 was probably the second scariest selloff I've witnessed.  It doesn't get as much hype as the Bear Stearns March 2008 bottom or March 2009, but the speed of the down move was a prelude to a bear market.  Expecting more weakness today as the capitulation gets closer.

9 comments:

Anonymous said...

You're not going to get a face ripping rally. This pattern has happened before. We will trade sideways next week, then get a retest of the broken necklines toward the end of the month.

Anonymous said...

tvix spiking up 50% in 5 days


dawg you in???

Market Owl said...

I am still bearish on this market. Let's see how the rest of the day trades. I feel like we'll be going even lower.

Anonymous said...

we have to bounce sometime, owl.

Market Owl said...

Next week we'll bounce, its not that far away.

Anonymous said...

i covered my shorts about an hour ago. I agree, a nice 3-5% move next week.

Market Owl said...

I'm still short. Nice trade.

Anonymous said...

BUUUUY DAAAA FUUUCKING DIIIIP !!!!

Market Owl said...

I'm out. Don't want to mess with options expiration shenanigans in the last hour.