V is for volatility.
The $vix.x hit 40+ and the market reversed from just over +100 points for the week. We have been expecting a violent reversal, and only liars or the extremely talented know exactly where and when it will come.
The V bounce gave a few clues but guessing against the trend is just that: [...]
Archive for September, 2008
V day
Posted in The System, tagged $vix.x, illuminati, reversal day on September 19, 2008 | Leave a Comment »
Fallen from Graceland
Posted in Psychology, tagged dead cat bounce, double bottom, gap and trap on September 17, 2008 | Leave a Comment »
Has Elvis left the building?
The market plunge continues to frustrate bulls and bears alike.
Extra-ordinary bounces like yesterday are meant to do one thing: squeeze shorts and hope they go away.
The egregious run-up over night is a great example of mis-direction. It stops out the shorts position trades, and then it entices buyers to be looking [...]
Is the bear market over?
Posted in The System, tagged bear market rallies, market plunge on September 16, 2008 | Leave a Comment »
Ferocious rallies are the hallmark of bear markets.
No one knows until hindsight. I have noticed, however, that secondary indicators like the Svix.x, tick, trin, etc are helpful, but only a fool will call for a bottom without seeing sideways action and/or major capitulation first.
Let the talking heads on CNBC make their claims; for me the [...]
911
Posted in Overview on September 11, 2008 | Leave a Comment »
Hi All.
Please be patient as our new site is being built.
More challenging than I thought; but we are making progress.
You can continue to view our posts here until the new site is up and functional.
E.
Ugly is beautiful
Posted in The System, tagged Long trap, one way elevator, read the charts, trend day on September 9, 2008 | Leave a Comment »
If you know the secret code, taking money out of the market is a lot easier.
Today’s ugly chart pattern is a thing of beauty to the market participants who know how to read it.
If you are not one of us, what is holding you back?
Day after day, week in and week out, opportunities abound.
Knowing where [...]
Look kids, there’s Big Ben
Posted in Psychology, tagged gap days, long traps, risk and reward on September 8, 2008 | Leave a Comment »
Chevy Chase at his finest.
Round and round we go. Market bottom is in. Housing crisis solved. Etc, etc.
What can Mr Bernancke and the government cook up now?
We’ll just have to wait and see. The market loves to squeeze the shorts. When “they” run out of gas, re -enter until it stops working.
Meanwhile, looks like taxpayers [...]
Feeding ground
Posted in Psychology, tagged dead cat bounce, profit taking, reversals, risk and reward on September 6, 2008 | Leave a Comment »
“Amity Island had everything. Clear skies. Gentle surf. Warm water. People flocked there every summer. It was the perfect feeding ground…”
At 11:30 I suggested to colleagues to take their short profits off before noon today. It could have gone to any day low, but I felt the weekly shorts should capture their profits early after such [...]
Chutes and Ladders
Posted in The System, tagged breakdown day, market plunge, trend days on September 4, 2008 | Leave a Comment »
Do you remember the game of chutes and ladders?
It was a favorite of mine when I was a kid.
Sometimes a picture is worth a thousand words.
Learn to see the big picture.
Bear markets jump out the window, so you either take the leap of faith or miss the move.
Risk and Reward
Posted in The System, tagged range days, risk and reward, sequence trading, stop losses, trend days on September 3, 2008 | Leave a Comment »
Sloppy and choppy trading for the vast majority of traders unaccustomed to sequence trading.
Plenty of setups today in both directions if you know what you are looking for.
Grabbing the majority of the move and leaving the last tic or two for the greedy usually works best for me.
That’s the essence of risk and reward; where do [...]
