agree market too hot! these big open gaps up are killers for
establishing a position. UFS was great example this am.
. only thing out there are gold stocks and i
hate catching falling knives.
Steve and I had folks asking us last Wed and Thursday about
shorting the market - my comments were, I would not chase it and
only if you get a good bounce, but otherwise a low risk short was
at resistance when the SPX tested the upper trendline of it's
channel in the upper 1680's, NOT chasing a sell off when it was
oversold and the trend was still up. Now clearly this market
uptrend is stronger than most, however this action should still
reiterate that it's best to short resistance and not short oversold
conditions after a sell off - you might get lucky once in a while,
but it's not objective and when the trend is strong you get burned.
If one shorted the upper trendline last week (see the
attached 30 min chart) you got a nice trade, especially if you took
profits on the sell off afterwards. If you were waiting to
instead short a decent oversold bounce, well you never get an entry
for it since the market didn't bounce enough last Friday for an
entry - so you are safe too by not being short. I make it a
practice to not chase shorts when Stochastics on a 60 min chart are
oversold - I always need a bounce. My reversion to mean
systems buy pullbacks in uptrends and they missing going long by a
gnats hair last week on the pullback unfortunately :(
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can't even short puts!
FLIR
Posted by hazbin1 on 28th of May 2013 at 10:06 am
agree market too hot! these big open gaps up are killers for establishing a position. UFS was great example this am.
. only thing out there are gold stocks and i
hate catching falling knives.
Steve and I had folks
Posted by matt on 28th of May 2013 at 10:17 am
Steve and I had folks asking us last Wed and Thursday about shorting the market - my comments were, I would not chase it and only if you get a good bounce, but otherwise a low risk short was at resistance when the SPX tested the upper trendline of it's channel in the upper 1680's, NOT chasing a sell off when it was oversold and the trend was still up. Now clearly this market uptrend is stronger than most, however this action should still reiterate that it's best to short resistance and not short oversold conditions after a sell off - you might get lucky once in a while, but it's not objective and when the trend is strong you get burned. If one shorted the upper trendline last week (see the attached 30 min chart) you got a nice trade, especially if you took profits on the sell off afterwards. If you were waiting to instead short a decent oversold bounce, well you never get an entry for it since the market didn't bounce enough last Friday for an entry - so you are safe too by not being short. I make it a practice to not chase shorts when Stochastics on a 60 min chart are oversold - I always need a bounce. My reversion to mean systems buy pullbacks in uptrends and they missing going long by a gnats hair last week on the pullback unfortunately :(