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 [...]
Archive for the ‘Psychology’ Category
Fallen from Graceland
Posted in Psychology, tagged dead cat bounce, double bottom, gap and trap on September 17, 2008 | Leave a Comment »
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 [...]
The Boys are back
Posted in Psychology, tagged gap and trap, head fake, reversal day, support and resistance on September 2, 2008 | 1 Comment »
Well, what an interesting day. Overnight globex ramp up, then gap up at the open taking out last week’ s high.
Clear sailing, right?
Wrong. Another misdirection trade catching traders buying the pullbacks all day long. Momentum didn’t begin in earnest until the lunch breakdown.
Overight actiivity is always suspect since volume is low and price can be [...]
Eisenheim Day
Posted in Psychology, tagged gap and trap, misdirection, option expiration, trend day on August 19, 2008 | Leave a Comment »
Eisenheim : Everything you have seen here has been an illusion.
Nothing is what it seems.
Monday’s misdirection play was a thing of beauty; even the great Eisenheim would have been applauding.
Traders were so busy looking through their rear view mirrors at the premarket high that they forgot to look at the cliff they were driving off.
After Friday’s [...]
First things first
Posted in Psychology, tagged first hour reversal strategies, go with the intraday trend, pullback, retracement on August 9, 2008 | Leave a Comment »
Determining the correct bias for the day is all important for the day trader. Are we buying pullbacks long or are we shorting the bounces?
What do you use to help you determine the answer to this question?
There are many techniques available to us, and we need to use something simple, reliable, and consistent.
My wife helped me [...]
Lemonade
Posted in Psychology, tagged FOMC, overnight reversal, trend day, tug of war on August 6, 2008 | Leave a Comment »
The lemmings were fresh squeezed today, making lemonade out of yesterday’s late day sell-off.
The end of day plunge serves four purposes:
The market seeks to find hidden support
Profit taking from the last move
The early longs yesterday get taken out
The stubborn shorts who cannot change their bias today get taken out
Successful traders view the markets as a tug of [...]
