Yesterday I ran this post, per the Best September in 70 years and CNBC’s four reasons why. Later in the day I came across this table from Bespoke Investment Group in this post.
How does that saying go….Bulls Make Money, Bears Make Money and Pigs get? We are going to “HARVEST” this good month….See below per why!
500 index is facing short and long-term resistance right now and the Euro/Yen finds itself at the top of a falling channel.
Bought the 500 index at (1) and due to these conditions we are going to harvest at (2). For those looking to score on defense, in this post we suggested to pick up the inverse Russell ETF (RWM) two days ago, which got off to a decent start with over a 1% gain yesterday.
For those looking to score on defense, do so with a 4% overhead stop. I will say this…if line (3) is broken to the upside we will follow!!!
Congrats Chris. Spot on trade. I shorted an individual French stock on Friday. Maybe too early. We’ll see if SP500 can get above this 1150 line.
I do value the VIX and it has made a sizeable “bullish falling wedge” which is bearish for stocks.
Thanks for the “what you are looking for-straight forward and little drama.” Not that I do, yet that is what I am attempting to accomplish.
I shared earlier a friend that has used my work for over 10 years, calls my posts the 28 second advantage. Clear, clean and gets the message quickly.
Per the two inverse ETF’s, I would keep them until falling resistance is broken…see “all the same trend” post recently.
Thanks Chris. I was also wondering if the vix can be used as supplementary info to understand if a trend will continue or reverse at either support or resistance.
I would like to add that your site is exactly what I need at this point – straightforward with little drama. Now I just need to manage the pre-existing damage. Any thoughts on China and Europe – I own some fxp and epv – hoping for a selloff so I can at least break even.
To finish the last post…
I want to pick on the weakest looking pattern between the 500, Nasdaq 100 and the Russell 2000.
Russel was at the top of its trading range, strong resistance and had created a “third negative” pattern at this range.
Couldn’t find that in the 500 or Nasadaq at the time. NDX has or had the best looking pattern, which didn’t give us the odds or the ability to put a tight stop at that time.
So far so good on RWM…picked up about 2.5% so far.
Thanks for the question. Chris
If I am going to attempt to score on defense, I want to pick on the weakest looking pattern between the 500, Nasdaq
Hi Chris – is the reason to use rwm to score on defense because small caps typically lead the market down?
On a totally unrelated note I was wondering if you think the fed or us govt is manipulating the stock market and if so how does this impact technicals? There have been some suspicious volume spikes like the one just before noon today that appear to ne aimed at changing trends.
I am a believer, resistance is taken out you go after it with a stop at the breakout, in its initial steps. Apple broke from a sideways trading range and you hope on board and enjoy the ride.
Chris…how do you approach something like Apple which has broken out and seems to defy gravity in it’s climb upward? Would you still wait until it returns to earth within a trading range or do you just climb on board and ride it to wherever it is going to go?
I use a 10/10/10 strategy…take a 10% position at a postive pattern situation…around a 10% gain harvest…do this at least 10 times a year and you have a decent amount of pocket change on lower risk high return turning points.
My pattern strategy is called TB&M…which stands for Tops, Bottoms and No Middles…looking for low risk, high return, turning points.
Hope this helps,
When you harvest do you use a tighter stop or do you just sell? Do you sell the whole position?
My weakness has been not harvesting because i think it will go higher.
I have been learning a lot from your postings both here and on Dshort. Thanks!!
Unless I post a specific sell order, the suggested “trailing stops” remain in place. Yes EEM and homebuilders do tend to follow, yet am watching each of them individually.
you are welcome!
Appreciate the comments…it might not show, but I am attempting to “inflate investors portfolios, regardless of market direction.”
Per the “all together markets,” I may not have succeeded in the message, was attempting to show that the entire WORLD was facing long-term resistance at the same time…”Trampoline effect” They are all moving up and down together!
I am a Occams razor fan (for those that don’t know what this is, google it). Does more tools make for greather success? Simple, Clean and Clear!
A friend of mine, that has put up with my work for over a decade calls it the Kimble 28 second advantage…it takes him about 28 seconds to get the point and understand what to do! Well I try to keep it short and sweet. I know people are really busy these days.
What about emerging markets? Homebuilders? Gold? Are you also harvesting these? Emerging markets and homebuilders also tend to go up and down with the 500 index…
This is really smart trading. Requires no knowledge of cycles and No superfluous indicators.
I like how you show the potential for all markets to go higher (since they are moving together), but you’re quick to capitalize off a reversal, near or at resistance. As well, I’m learning lots about catching trends as they break through resistance, as opposed to exclusively catching reversals.
Thanks so much Chris…