- This topic has 196 replies, 15 voices, and was last updated 10 years, 6 months ago by
.
-
Posts
-
Closed some more shorts. still hold a long term position but quite small stake and looking to add if it breaks or goes higher! 🙂
The next market move
Author:Jim SamsonJan 27, 2014
samsonLast Friday’s action in the markets was awful, no doubt. It was the worst week since June last year.So what happens next? Did this mini-crash reveal any hidden opportunities?
Let’s take a look…
Only last week I showed you that a break below the 1800 area wouldn’t be so good, and the S+P did that in style on Friday:
127141Expect further downside to the 1770 area, perhaps after a small upwards bounce to the 1800 area. If the S+P can’t hold above 1770, the drop will likely continue to 1730. If it does hold above 1770, that’s a good sign.
So what does this mean in terms of what’s happening?
Well, I refer back to my 2014 prediction:
“What you see above is a market in a stubborn uptrend. A little overbought currently, and due for a correction, yes, but the uptrend is intact until proven otherwise.”
What you’re witnessing is that correction. Anything can happen, and I’m not saying Friday’s action was fun, but it was somewhat expected. To put things in perspective, let’s take a look at the longer term chart:
127142
That puts Friday’s drop into focus, doesn’t it? The S+P will have to do a lot worse than that before I change strategy- this is clearly a downward correction in a larger uptrend until proven otherwise (a ‘countertrend’). I’ve said it before, and I’ll say it again:
“The bull will do whatever he can to shake you off, and he often disguises himself as a bear.”
Dear reader, stocks don’t go up in straight lines. Now, a day like Friday can be useful though because it’s a chance to see what stocks were swimming naked when the tide goes out. In other words, it shakes out the weaker stocks from the stronger. Take a look at stocks that weren’t that badly affected on Friday. Or, even better, which stocks were UP like Microsoft.
For example, on September 2013 in this article, I said to take another bite out of Apple as it pulled back from its advance. The price then was $462, and the price now is $546. But on Friday it only gave up $10. And it didn’t break support, unlike the broader market.
So take a look around and perhaps use this as an opportunity to do some weeding in your portfolio. And let’s watch this bull closely as he plays his games with us…
Best,
Jim.
“both 2012 and 2013 were gap up years , where the opening gap was never recovered .
last consecutive gap up and go occurrence was 1975 and 1976.
1977 also saw the opening gap never recovered …this time down.
2014……..?????
good stats with v low risk ,so went 200% swing short at the close on 31/12/13 and added dax and ftse shorts this morning . stops just above Friday’s highs .
my last attempt at a swing short cost me 10 pts and we’ll see if we get the gap down today to set it up.
in any event will look to reduce the shorts to lock something in if we trade negative for 1-3 days , before the inevitable bounce.
Good Luck and HNY”
it’s a moot point whether this is still in play – cash gap filled , futures backtested and some wider indices exceeded , some not ….
anyway , I’ve just closed my 31/12/13 swing position . Lots of eyes in the 1770’s , probably too many , so better to take the profit and try not be too clever.
might have a stab long at 1775 ish , but otherwise flat pending the next swing short
The depth of this drop will cause a lot of traders to do some homework this weekend trying to guage where it bounces.
Time wise a bounce starting late monday or early tuesday seems the best fit to me.
When it comes the bounce will tell us a lot and if it does not then a black hole opens 😉
Entering the window.
Never give up, never surrender.
“both 2012 and 2013 were gap up years , where the opening gap was never recovered . last consecutive gap up and go occurrence was 1975 and 1976. 1977 also saw the opening gap never recovered …this time down. 2014……..????? good stats with v low risk ,so went 200% swing short at the close on 31/12/13 and added dax and ftse shorts this morning . stops just above Friday’s highs . my last attempt at a swing short cost me 10 pts and we’ll see if we get the gap down today to set it up. in any event will look to reduce the shorts to lock something in if we trade negative for 1-3 days , before the inevitable bounce. Good Luck and HNY” it’s a moot point whether this is still in play – cash gap filled , futures backtested and some wider indices exceeded , some not …. anyway , I’ve just closed my 31/12/13 swing position . Lots of eyes in the 1770′s , probably too many , so better to take the profit and try not be too clever. might have a stab long at 1775 ish , but otherwise flat pending the next swing short
thanks Baaa, I took a bunch of points from ur pointer…. keep us updated
Don’t understand the query regarding the gap down 2014?? The gap filled totally on January 15th so there is no question of a repeat of 1976.
Turkey raised interest rates from 7.5% to 12%.
How perverse is that?
Plan your trade, trade your plan!
LOL, so the s&p spikes up 8 handles in one 5 minute candle. Great innit.
Thanks for info K
Prolly be back were it started by morning.
Indeed and another 5 now on globex reopen
You got to love them. Never thought a massive surprise hike could do this.
Plan your trade, trade your plan!
I remember few year ago when Greenspan raised rates unexpectedly without an official FED meeting, ES went up mega in an instant.
I guess that will be riots in turkey tomorrow then ?
may circa 50% increase in interest rates… that’s gotta hurt the joe bloggs of turkey !
be interesting to see if its a spike and backs off through the night.
- You must be logged in to reply to this topic.