Sometimes when you are staring at the trees, you forget about the forest. If you are staring at a dead tree in a vibrant forest of healthy trees, then you are missing the point. Shorting the market is like looking for the dead trees, hoping for a drought, hoping for a random fire. The market is down less than 2.5% from the top. Not from the closing high, just the intraday high. From a closing high, its less than 2%. We are in the middle of a raging bull market with low volatility. Low volatility is more a sign of supply-demand balance than complacency. From what I hear on CNBC, I see many more looking for a correction than a straight up move.
The fact that there are willing buyers of US equities (corporations, funds, etc) means that we don't get big dips.
Right now, we are passing through a little storm, the branches are shaking in the wind. If I had to buy or short at the current price and hold for 1 week, I would buy. Had to hold for 1 month, I would buy. Had to hold for 3 months, I would buy. Had to hold for 1 year, then maybe I would short.
I am just looking for a good entry point, so I am waiting, but this sucker is going to go flying back up. That's what ALWAYS happens. Just a matter of how it does it, and whether its today, Monday, or Tuesday. I am betting that we still have one more push lower before the BTFD moment. I could be wrong, and we could go straight up from here. But the severity of yesterday's selloff and the calendar tells me we have 1, maybe up to 3 more trading days where volatility will be elevated. Once October comes, you have to already be long. Got 3 trading days left to buy the dip. Before the next blastoff to new highs.
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7 comments:
Would not be surprised if we go up from these levels.
Monday big red day is coming imho.
The downside of waiting for a better entry is that you do miss a bounce like today. You can't have everything in trading. You either have fewer winning trades and higher winning percentage, or more winning trades and lower winning percentage.
Definitely didn't expect the Friday afternoon short squeeze, but it does look like we'll get a smack down on either Monday afternoon or Tuesday morning.
The short squeeze is for traders who short from the 50ma..so Market makers squeeze through it. Shorts were coverd. Now,bullish everywhere again. that's why I think we will have big dump and final dump to enter Long positon.
Dip buyers are so bold and loaded with cash these days, after just one down day, they overwhelm the shorts and skeptics. But fundamentals are deteriorating in stocks, with dollar really strengthening and earnings growth very low. Despite this, price action and volatility for the last year supports higher prices.
The FTSE 100 was strenthening in the aftermarket which is why I was expecting the s&p to go which it did. FTSE looks like its bottomed so this might have been the bottom too in the s&p.
Europe has been getting a lift from the weaker euro. At these levels, it really helps the exports for European big caps.
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