Although I know I'm a fool for trying to call short term bottoms when a big wave 3 is probably underway, but I like to keep profits when I get them. And exiting some or all my positions now is fine when I can simply just add them back on when the S&P makes a new low. The market is oversold on the daily charts and momentum lower has been weakening as discussed yesterday. Now the Dow and S&P have both made 5 wave declines today, but the big problem is that the Dow made a new low and the S&P has not. This again shows a weakening of the downtrend as not all indices are even able to make new lows together. I would be cautious here if I was an aggressive bear, and if anything I would keep that caution on unless the S&P and the Nasdaqs confirm the Dow's new low. If that occurs then I'd simply put my shorts back on. So I'd only be missing a few S&P points of profit to perhaps save myself from a possible huge rally into the close, or early next week. So the risk of missing profits is small and the potential to safe already existing profits is great. Again, if the S&P and Nasdaqs make new lows to confirm the Dow's new low, I'd simply put my short positions back on.
Just a thought.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
4 comments:
i think you know that its a big primary 3 but dont know how to trade it,big 3 waves are not so kind that it'll keep giving you big retracements to reposition yourself.There may be a 10-12% crack in a single session in a near future as every retailer is positioned on long side, mkt always does like that
Todd,
Would welcome your wave count on the subdivisions of this minute [i] of minor 3. It's not clear whether the entire post gap down move was an extended 5th or a 3rd.
Gut feel says NDX does not fill the gap, and minute [ii] might be small just enough to suffice a count, and maybe short-lived in terms of time. Would love to read your post on it.
I noticed you tend to post your thoughts an hour or so BEFORE market close. Your timely posts are much appreciated!
Thanks.
Yeah I hear ya, that's why I put in sell stops to short on weakness. It seems that this wave 3 is going to be a "slow bleed" instead of a sharp panic selloff. The former being the most destructive usually because it keeps the bulls on the sidelines and no short covering rallies ever materialize, therefore removing a big chunk of buyer power from the market.
I'll be short again with a new S&P and NDX low.
Todd
Hi Crush,
Yeah if I see something notable prior to the close I like to mention it to give folks an opportunity to consider it while trading is still open.
It looks like my first count from yesterday was correct where today we had a wave iv of (i) of 3, and then today the Dow made a new low to possibly complete wave v of (1) of 3, leaving the S&P and NDX behind since they didn't make new lows. That divergence makes a good setup for a possible large and sharp wave (ii) of 3 anytime. I wouldn't get long, but I'd be cautiously bearish here until the S&P and NDX confirm the Dow's new low. If the S&P and NDX make new lows to confirm the Dow's, then it would appear wave v of (i) will extend substantially lower.
Todd
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