Wednesday, September 28, 2011

Mid-Week Thoughts - Right Idea, But Timing Was Off A Bit - 9/28/11

The title tonight is referring to my weekend video where I shared my belief that we would likely see some window dressing into the month's end followed by a resumption of the heavy selling we saw late last week.   I was right with my idea, although my timing was not right.   I expected to start looking for shorts on Thursday or perhaps Friday, but the gains we saw Monday and Tuesday were much, much heavier than I expected.   Given that they were so quick and sharp, it actually made me feel more secure in the idea that we were going to selloff soon.   I added four short positions (QID, BIDU, AKAM, and APKT) yesterday near the close and all of them turned out fairly well after today's nasty afternoon selloff.  

Although I do believe we are going to break the August lows within the next month or so and have a harsh selloff upon that event, I am not certain that it will be this week.   This remains a market that is very difficult to swing trade as this week's volatility continues to show.   It would not shock me if tomorrrow we are back up 2-3%.   I would not take that action as bullish, but rather simply a statement that this market is still psychotic and not ready to do much other than chop most traders up into bits.  

I considered adding another short or two today but since I am almost fully invested on the short side as of now, I settled for adding a bit to the QID position and not doing anything else.   I do see some short setups out there and will put the charts below that are worth watching, but beware.   Since we put in a reversal Tuesday and a nasty selloff today, it is riskier to short at this juncture.   It's very possible we fall off a cliff here and if we do, it's all good.   I would put stops above today's highs on any shorts you may enter and go from there - that way you protect yourself in the case the market decides it wants to continue to screw with us all.   These charts are also posted under the assumption that we don't have a massive gap tomorrow, which nowadays is a very big assumption. 

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Be careful out there.   I haven't even gone through my long scans for about the last week because I know there is nothing out there worth buying, but shorting is never easy, especially in a super volatile market.  

1 comment:

Anonymous said...

hi mac
i think i start understanding the falling pattern after i split every chart into 30mins. thats how they swing up n down at every oversold and overbought.

b4 that, i wasnt able to spot the reversal on daily chart.