My Approach

The evidence suggests that a short term bounce may develop early this week. But since we're probably in a wave 3 of [3], that bounce may not occur until hundreds of more Dow points are removed. And although I play the "in-and-out" day and swing trader game in the short term, I do keep focus on the bigger picture for my longer term core positions that I rarely touch. The bigger picture suggests we are in a major downphase of the market that will work prices much much lower in the coming months, and perhaps years. So I feel sticking with the short side, as long as key levels aren't taken out, throughout this phase is a wise choice. If I feel a bounce is coming, I might take some profits on short term positions and look to re-enter on that bounce, but I would not even think about trying to get long, nor will I touch my longer term core short positions. It's also important that if I do play for a bounce, that I set a "sell stop" order beneath the current market price so that I can re-enter the market if I'm wrong about that bounce and the market were to just keep moving lower. Again, I'm only doing this with my short term trading capital as it will allow me to take aggressive positions for big potential gains, and I know that no matter what happens with those short term trades I still have my longer term short positions in that I don't touch. So I just wanted to explain my trading approach to the market as this decline progresses and be clear that I remain longer term short despite moving in and out of the market with other short term trades.

Below are a couple articles that I thought Prechter followers might be interested in:

With the US trapped in depression, this really is starting to feel like 1932

Dow Repeats Great Depression Pattern: Charts



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.