I am not into day trading and I don’t want to get into very short-term chart patterns…yet I will eat my words today! Yesterday in the quiz I highlighted the following technical observations… (see post)
1) 500 index at the highs reached in January. 2) Fibonacci 61% retracement level. 3) Rising wedge 4) Falling wedge in the VIX. Speaking of the short-term, can we add action of this morning into the negative mix???
First off….This day is long from over with!
Micro view of this morning…. A pattern that more often than not, takes place at highs!!! If you are long, you usually don’t want to see a 1% upside wick take place, with all the technical situations mentioned above… Oh, by the way, did I happen to mention that the dollar had a terrible month and only 5% of investors are bullish the one asset that could change its trend?
Again…This day is long from over! Good luck everyone.
Possible ascending wedges evident in XLU and XLB as well.
Mike,
Calculated Risk is a daily read for me. I also look a dshort.com where I found this site. I am not sure what Chris is doing is predicting the short term as much as following trends based on prices. Long and short term are relative. Some of his recommendations may end up being much longer term than others depending on what happens and how things look.
cK
cK,
Your description sounds like me. No matter how much you read, you’re always looking for some more information.
I’ve managed to whittle down my sources pretty substantially. If you want to stay abreast of the most important economic data, Calculated Risk is a better source than Bloomberg or the WSJ. Just the facts and cogent analysis without the manic/depressive hyperbolic nonsense.
http://www.calculatedriskblog.com/
…but that doesn’t help much in predicting the market in the short term.
My experience has been that the market is unpredictable based on the news and my success rate has been about zilch using this information to make investment decsions even though I have spend alot of time and effort into it. This has been unproductive and frustrating. Going forward I think it makes more sense to make decisions based on price patterns and ignore the news and even ignore your portfolio day to day after making investments and setting stops. Just check this website everyday for updates and use the rest of your time to enjoy life. Don’t get caught up in the fear and greed media hype.
Chris and Bob in Ma….I was not really serious about an annuity. The fees and inflexibility are killers. I have most of my pile in Treasuries, but I have a self-directed IRA that I trade with to provide “pocket money” for everyday expenses and to have “fun”. I’m having a little trouble, Chris, trusting the “power of the pattern” as I have always looked at economic conditions and “street” talk to guide me in what to buy. I read about a dozen online newspapers and blogs each day to keep me informed about the market(that is, I think they keep me informed) but I have noticed that, while the market is logical, I am not smart enough to figure out it’s logic. So I am now going to put my trust into “gnomes” and rely on technical indicators with Chris’s guidance. I have done about as well as the S&P averages so I hope to increase my success rate with you, Chris. I will buy SDS at the end of the day today and see how that works out.
Thanks for your responses.
Mike,
Most of my portfolio is geared toward income, like an annuity. I have bond funds, high dividend stocks, an MLP, etc. But I trade a smaller portion. I have a medium term bearish view, so I’m more prone to make bearish bets, which is also a good hedge on the stocks I own.
FYI…
The weak of late (Banks) are acting STRONG TODAY!!!
Micro news…a sign of strength!
Bob…
buy the rumor sell the fact?
The great point you bring up is EXACTLY why I have faith in the power of the patterns. No telling how much news is already factored into the markets or what the take on the news is!
Give me price and lets see if we cna “inflate portfolios” more often than not.
my bad for the typo above …should have said…”decent pocket change for READERS.
Chris,
I’m convinced these short-term turns have little to do with data, today the data definitely positive and was all out before the market turned. And the turn from the bottom in August occurred as totally atrocious housing numbers were released, way worse than what people expected.
And I’ve learned from hard experience, making a long-term bet (especially betting short) and missing the short-term trend can be very, very painful.
Mike,
does the annuity have inverse funds??? Way TOO MUCH opportunity today, tomorrow and forever to say the “heck with it!”
I know you have been watching my posts for months and we have made some decent pocket change for readhes since I started posting on dshort the first of March and now on the blog. Ever seen my say, due to this or that fundamental issue in the economy we aren’t going to follow the “power of the pattern?”
I did the quiz for a reason last night…what a great set up!!!
I promise you and readers of the blog, I will not post a chart just for the fun of it. I take the quiz’s very serious! I look for what I feel is one of the best opportunities and put it into the quiz.
Last night I didn’t even try to hide anything..full pattern disclosure on all fronts.
Opportunity has NEVER been better Mike…let the patterns be your friend please.
Chris
Chris…I see the pattern you are talking about and it says to me sell the S&P. But, non-technically speaking, the possiblility that the FED will print more money to goose the economy more is preventing me from buying SDS. What would be the best move now? Wait a while? Go for the gold in SDS because of the technical indicators–the “pattern”? Or just say “to hell with it” and buy an annuity!