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I will know it is time to short with impunity when the 21dma turns down.
If spx closes below 1550 next week, it turns down. Then, if spx closes below 1560 the next week, the 21dma turns down.
bottom line: new highs, even 1600 possible into early next week, but more likely we drop to 1540 and then rally back to 1565 followed by a drop back to 1490.
Just a hypotheses, nothing more, but is my trading plan.
Bollinger bands are tightening up, says big move coming. I would not bet the farm right now on either direction, but i think we get a fake move one direction, then the market moves big the other direction. Typical insanity.
No solid sell or buy short term, but leaning towards sell, and we are so far overbought longer term, i believe sell is coming soon.
all i have is the daily numbers for the spx going back to june 1992, and the weekly dow going back to august 1986.
Plus the cboe numbers back to 1992.
High trin for several weeks, can be a buy or sell depending on where the market is. With new highs, is a sell in my opinion.
Amazing, got filled at 44.25 this morning, now long 20$% OF my money in sds. Will sell if I get a buy signal, or add to position if we rally back to recent highs on friday.
The end is near, at least would recomend selling long positions.
Of course, there will be corrections, fed or not. And now the fed may stop pumping this summer and then look out below.
Tops form slowly, we will have more rallies even if we fall for the rest of the week, which will set up a 2 to 5 day rally next week.
Pretty ugly pattern today, but have seen that not work so many times, not willing to go short heavily at the open tomorrow. In the past, would be short already.
Short the next rally, and for sure the next big up day is a short op.
That will sink the market, for sure, as all that is holding it up is the fed.
AT some point we correct 5 to 7% this month, that is a given for me. I think if we can run back up above 1570 this week or next, i go short. If we get a good buy on the daily (not today) then I will buy for the short term trade.
Normally I would be super bearish right now, but the fed is propping up the market, maybe for another year, but more likely eventually europe will become such a big problem even the fed can not keep prices propped up.
For now, am bearish on tomorrow, 1540 is possible target, but if 1549 holds, then we could rally back to 1570 friday.
btw, key reversal today, and closed below rising 21dma, which is bearish. Not a good day to buy on the dip. If market is strong, will go sideways into friday. More likely we get a 3% dip, and then another rally to new highs.
Not doing much but watching my GLD lose more and more money.
trin over 1.6, final tick was below -600, but went back to neautral in last minute
Almost got buy signal, but did not happen, so more downside possible. support at 1543, if that does not hold, could get ugly fast, but more likely that does not happen.
Market not for the faint of heart.
Thanks, is same on all charts of 200dma, market too far ahead of itself, and we will have a 5 to 7% correction for sure. Still see another run to 1570 or even higher, but if 1540 does not hold, short that rally for sure.
Patience, patiencs
nothing to worry about as a bull, as long as 1540 holds. If that breaks, then for sure short the next two big up days in a row, or maybe a few small up days with one big one at the end, to set up the short.
Of course, I had a 2k order to buy sds at 43.7, did not fill. Again, dont be greedy (me this time) and can make money.
Found it: $NYA200R
Can anyone help me? Do you know the symbol for how many stocks are above their 200dma on the nyse for stockcharts.com? I have seen it and for those above the 50dma too.
Is a good indicator, when it gets over 80% says the end is near, same for a buy when less than 20% are above the 200dma.
BTW, we are at dangerous levels for the spx being above its 200dma too, but in past it can go up for another couple weeks before it corrects.
My gut says tomorrow is the top, but playing the reality of the charts for now.
We have had high trin reading a lot for past couple months,which means more volume going into stocks that are going down instead of going up, an interesting item.
Todays negative s/d numbers not important as a one day event, but when the a/d numbers weaken with stocks going up it signals the rally will end, but can go like that for months (like in 1989-1990)
Pattern is actually predicting higher prices for now. As a bear, hate to say that, and an outside event will eventually start the bear market, so be careful buying stock for now.
Am watching into the close, and it looks like we have one more or even a couple more up days before a top. Almost bought sds at 43.7 earlier today, will put an order to buy some at 43.6 tomorrow. Not a lot, but accumulating short positions now makes sense.
I would prefer to see one last big up day, 1% or more, to finish the pattern, but it may wait to do that on the final rally off the first 5% correction.
Not an easy market to trade, congrats to those who bought and held the past 4 years.
To make a clear price pattern top, we need to go up a bit more, make a new high in spx and then we will turn down.
So not being agressive shorting, but an external event could knock this down anytime now.
Although 1576 is likely top, could run to 1600 by end of the week.
Fun to be so close to the actual top, after being fooled so many times in the past couple months.
Yes, my Uncle, the famous economist, says economy fragile here, just needs a push to knock it over. Italy or spain will do it.
China tightening, only time until it hurts world economy.
I keep shorting, carefully and with short time frame until the trend changes.
will buy some sds at spx 1575. Still not getting any sell signals, but that level is a good bet.
will only put 20% of my money into sds, not more. Will watch for clear sell signal maybe at close.
Up and away, amazing.
Just checked, and in the past we have had the kind of options numbers like today, and the market still corrected 5% in the next couple weeks.
No indicator always works. Think is best to not play this market for now.
Have been following mr russel on and off since 1987. He can be very wrong, or right.
I dont consider what "gurus" are saying, as have seen them be right or wrong too many times. Helps to read what they say, but make my own decisions.
Not feeling safe being long or short here, still have 10% in gld, which has not been the best investment so far, but eventually it will pay off big time.
If we can sell off into close, high trin, may be a good long entry.
Wow, amazing to find someone that bullish! Best of luck to you, as if you are right, will set up the best short in history within a month.
I see a lot of fear and enthusiasm, which leads to primary trend extending farther than anyone expects, but ends badly for the bulls eventually.
FEd can only do so much in face of political problems
I dumped my sds at 44.4. Agree, down into close, but am not ok with the fear in the options numbers. If no fear there, would be still holding short. could be wrong, but am sure at some point there will be a clear short signal, and i will take it.
Best of luck on your sds. Lots of resistance over 45.
added to my sds postion at 44 just now, probably should wait till the close, as think we go up into close. Am 50% long sds, asia was down big, but nothing stops the energizer us market.
You remember my CS name! I am pretty sure we are topping, even if we do rally one more big up day. Adn too many times, when it looked for sure to go up, it goes down.
Europe may be closed, but asia is open for business, and they can move our markets too.
My basic instinct is I will make money on this trade.
Thanks for info, low volume not as worrisome as most think. My gut says boring low volatility day tomorrow, as most players already heading for vacation. Monday will be big up or down, am hoping down.
actual long and short out there? confusing pattern, confusing indicators, what makes people on this board willing to take a position?
I am betting on the seasonality and that we are still overbought on an intermediate cycle.
Best of luck to all.
for the record, sold me sds at open, bought more at about current price, 30% of my money this time.
I think we go up tomorrow, but not sure, and so am holding a small short, which I will add to if we rally tomorrow.
Market cant make up its mind, but remember it can fake out everyone when it moves in one direction out of this tight range.
Nothing is certian, anything is possible.
We topped out march 24 in 2000, and then the first correction, followed by the rally trying to reach the first top.
Yes, this is not 2000, more like 2012 or 2011, but I still think the economy is in real trouble later this year.
tick at 425 at close, options suggest higher prices into thursday, will dump my sds tomorrow if we drop a bit, like to spx 1559.
Taking little bites, yummy.
Watch for tick over 1200 at the close to sell the farm and buy uvxy and sds.
For now, upside is still likely into thursday, so am short too early, but again, bad news and stocks sink fast and furious.
Tbanks for the info, just bought 1k of sds at 44.3, but will dump if I can for a small profit tomorrow, wait until end of trading wednesday or thursday to buy and hold sds.
Market topped on march 24th and then april 10th in 2000.
the moon cycles do work except in a strong trend, when nothing works other than staying with the trend.
Am shorting again this week, hoping to be fully short by the end of the week. Think we see 1575 by thursday, and will short heavily then. April and may could be very cruel months for the market.
Thanks so much for all the charts, awesome!
Short term direction is almost impossible to predict, in my opinion. Most short term indicators are flashing buy, but some longer ones are flashing sell.
News driven, difficult to predict. Taking an enormous position is not smart under these circumstances. In my experience, better to wait for the next big more up or down, and then play the resulting reversal from that.
I lean towards just going short and holding, but will wait for thursday and short then, if all fits. Todays high negative tick and high trin, and high 5 day trin, all say upside is the easiest path.
GS is not doing well, bearish longer term.
With the new interday high, this is the 5th longest rally since 1992 in the spx without a 5% correction.
Maybe rally is due for a 5-7% correction soon? Some rallies lasted almost a year, so no guarantees.
Todays action is more indicative of a top than a continuation pattern, but honestly, i have no idea what the rest of the week will be like, so waiting for a clear signal to trade again.
best of luck to those who can read this pattern and predict.
I have the daily spx since 1992 on excel, and the weekly dow back to 1986 on excel.
Use it to see when we are at extremes above or below moving averages, etc.
Interesting that in past 4 months, when market gets overbought, it never gets oversold, instead just goes back to neutral.
My experience asys the market will top sometime in april, early may. Acording to your numbers, best bet is after the 2nd week in april. Thanks
Not sure where you got that info, but it works!
Am looking to short in april, according to your model, when is the next week down?
Am confused with todays action, expected a big up day, but markets never are that easy.
tbt is the best way to make money on a bond crash. Futures are good too, but in the stock market, tbt. Dont short bonds or tlt, as you have to pay the interest.
HOw to know what side of the market to be on:
The 21, 50, and 200dma are the best indicators to use for identifying where you are in the cycle.
Stay long if all 3 are rising, like now. Caveat is when price gets too overextended above all 3, sell.
Stay short if all 3 are dropping, unless like above price gets too far below all 3.
Use the 21dma for short term trading, the 50 is the least useful but is a good intermediate signal, and not respecting what the 200dma is doing is a great way to lose money. Remember, the last time the 200 dma turned down was dec 2007, and it turned back up in july 2009. Did an even better job turning down in august of 2000 and back up in april of 2003.
It did turn down in august of 2011 and then back up in feb 2012, so can keep you out of some rallies, but using the 21dma to time trading would have had you out of the worst of the drop in 2011 and back in for the rally after.
Another valuable tool. All 3 are rising rapidly right now.
How to identify a short opportunity:
Price Pattern: Looking at the past 3 tops that led to declines over 5%, including the big one in 2011, we had 3 tops before the decline. It can take months, like in 2011, or over a couple weeks like in april and sept 2012.
What would set up a perfect short this time, is a big up day monday, followed by a couple days down, then another leap to new highs, another small correction, and one last rally. Sell the farm and short the last rally.
Sentiment: Watching for a high put call number on ISEE also, has worked well when is over 200 for the past couple years as a short term sell signal. Also a put call under .5 for equity options on cboe is a great signal. Weekly numbers are on a sell already.
Bottom line: Shorting a rapidly rising trend is not the best way to make money, but imagining that when momentum actually ends that it will start up again is as good a way to lose money as any other. We are close to a top, short and intermediate and long term, but not quite there yet.
For the record, if we do go up big on monday, i will short in afterhours if price goes up a bit more. If we get high tick readings at the close, will short for sure in afterhours, as that was the signal last time for a 3% drop in the next couple days.
Wow, pretty heavy stuff. Remember, the crash of 87 was partly triggered by a collapsing bond market, and the dollar crashing too.
History repeats: Eventually all this printing of money, with demand for recources expanding, will lead to hyper inflation. NOt sure what will trigger it, and I actually dont see it this year but what do I know?