FWIW, I am more of a fundamental mid-term investor than a
short-term trader. Consequently, I shorted IYR long ago (like going
long SRS) since CRE is doomed long term. These continual losses on
that short are eating away at me. I am really feeling the short
squeeze. I know, TA should have told me not to short it long ago,
but I did - I don't know how long I can resist covering.
Maybe one possibility -- 33.05 was the previous swing high --
could cover here and re-enter short if IYR goes back under that
level or breaks the 50MA (red) or 200MA (blue) both around 32.60
now. Your call obviously but waching losses mount is an energy
drain -- I've done it too often myself.
You may in fact be correct over time concerning the fundamentals
BUT the technicals give you an indication of when to enter and
exit. Many thought the same thing about the internet stocks
in 1999 and 2000 and shorted them based upon the
fundamentals. While they were eventually proved to be
correct, many went BROKE because they ignored the technicals and
shorted too early. When you make a trade you need to adhere
to risk management which NEEDS to be set at the time of entry and
not adusted along the way. Currently, the intermediate trend
is up and we won't be looking to play short until it changes.
Don't try to pick tops.
In line with not picking tops, I guess it's not a good idea
to jump into the market now that I've just got back from an early
appointment with the dentist's and just seen the market situation
!! Ten to one, if I bought now, the market would roll-over ! I'll
just watch and wait.
Posted by jguerette on 23rd of Jul 2009 at 11:30 am
I feel your pain.... I was long srs for a long time and finally
just got crushed into submission. That could be good for you
as it will probably turn around now that I sold.
I've found that fundamentals rank right up there with emotions
when used to time markets short-term or even intermediate-term.
Unless you plan on holding for a very long time (and assuming you
don't mind your investments going against you in big ways
during that timeframe), it's best to trade based on technicals in
the short- to mid-terms, and leave fundamentals to truly long-term
timeframes. But even if you choose to use fundamentals short-term,
they need to be confirmed by the technicals.
Posted by randall68 on 23rd of Jul 2009 at 12:18 pm
The technicals while important have not been much help since the
March low. If you were bearish, many indicators have been
overbought and stayed that way, most of the formations including
head and shoulders, rising wedges etc never panned out. or worse
yet trapped you into going short. If you were bullish and followed
the technicals once again you didn't fare that well as many times
bullish formations broke down. If you acted on the breakdowns and
sold, then you were sold out only to watch the market recover from
the breakdowns. The only real way to make money was to buy and
hold. The more you paid attention to technicals, the more you
risked getting stopped out of your bullish position.
I am a retired radiologist. TA like radiologist in medicine that
thay don't treat pt. directly, look at a lot of charts and
speak from both corners of their mouth to cover the basis and make
us more confused. i have been with this site for more than a year.
look at the watch list, thay got out of SSO on march 22. I
missed this uptrend move and Chopp CHOP my portfolio. You may want
to look at
www.timerdigest.comand
follow the consensus signal for long term investment.
The watchlist is simply a list of trade ideas - what in the
fundamentals told you that the market was going to turn in
March? Come on - being an arm chair quarterback is no
way to frame an argument. Please support your thoughts with
some analysis. While we may have taken off SSO early on the
watchlist, we HAVE CONSISTENTLY said that Primary Wave B was likely
to retrace approximately 1/3 of more of the decline. We are
far from perfect but if playing the watchlist did you also play
everyone of the other picks? How would that compare to just
holding the SPX?
Steve/Matt - I think this has been suggested before,
maybe a buy/sell signal in the premium section will be helpful
for intermediate term investors. This way they do not need to worry
about daily noise.
Posted by junkmaylbox on 23rd of Jul 2009 at 01:55 pm
If one is following the consensus, one is always late. The
primary trend reversals were very obvious after 3 days for
me. There is no need to turn reality into a picture of reality, and
wait till majority agrees on it.
randall68- One other comment; back in March we gave a target of
1000 - 1120 for the SPX. Now the intra day updates on the
blog and nightly intra week updates are NOT geared toward managing
your 401K, they are for swing trades and the short term
trades. However we cover the intermediate to longer term
trend on the weekends and backin march we gave a likely target of
SPX 1000 then or higher; that is playing out. I suppose you
could have bought in Long and just held. However our intra
week stuff and the blog stuff is geared for timing the short term
movements etc.
Posted by junkmaylbox on 23rd of Jul 2009 at 01:37 pm
A good observation: buy and hold is perhaps the only strategy
that works well on the markets this year and since the September
breakdown last year. Reversing directions is sometimes confusing,
yet after that holding on is pretty straightforward. I wonder why
it's the case. This is my first bear market to watch.
junkmaylbox- agian it depends on your time frame. If you are a
short term trader and short term swing trader, then no buy and hold
will not serve your objectives. One of my trader friends
sometimes makes $100K or mor a day trading TF futures, obviously a
buy and hold would not interest him. Now If you work a job
and can't follow the market; well then just play the intermediate
trends. It depends on you and your time frame and trading
style.
That is a totally false statement - the technicals told you that
the market was bottoming in March and to prepare for a turn in the
PRIMARY TREND to the upside. If you are a true swing trader,
you would have remained in this entire advance based upon the
technicals (since swing traders allow for deeper pullbacks).
During this uptrend their have also been pullbacks that were
identified by the technicals if you chose to play as well.
Not everyone is a BUY and HOLD swing trader. Just line up
your objectives with the technicals representing the proper time
frame. The short to intermediate trend on the SPX changed
after topping out on June 11th telling you to be cautious (short
would have been no lower that SPX 928) and then reverese last
Wednesday (SPX 912 area but still below 928). So you could
also have profited from the decline and reversed long ACCORDING to
the technicals. Simply put, match the proper time frame to
your trading objectives. Those who simply buy and hold are
still down 40% from the October 2007 highs.
Posted by junkmaylbox on 23rd of Jul 2009 at 01:47 pm
Steve, Thanks for outlining a modified buy and hold strategy in
precise terms. Buy and hold means only for the duration of the
current intermediate trend (the major trend is down).
Posted by jcomptonod on 23rd of Jul 2009 at 12:50 pm
You are missing something. First, not everyone trades on
the same time frame and not all of us trade the same, anyway.
I use the technicals to find my spots and am more of a
position trader, except when the market is in a trading range, then
I am more of a short term swing/chart reader trader. I
have been mostly able to stay on the right side of the market,
while avoiding big risks. Buy and Hold had been proven
pointless simply by looking at the chart between 2000 and now.
This is a technical analysis site and we use our techniques
to give us an edge over those of you that don't. Stick around
awhile and you'll learn how. all the best, john
Posted by trade_happy on 23rd of Jul 2009 at 12:41 pm
Since the March lows we've been in an uptrend. "The Trend
is your friend" is not just a cute, rhyming cliche. And in
his excellent book, Trading For A Living" Dr. Elder emphasizes that
in a trending market there's
really no such thing as overbought - it's not a reason to short,
it's just a reason to take some profits or start to watch more
closely.
The first day we closed above 875 the TA from earlier 2009 told
us 875 might be shelf support, which it was: May 13, 15, 21
June 23... July 9... And in our updates
we've constantly been discussing a target for this late
summer/early fall of around 1000.
If anyone missed this move or got short-squeezed, I know that
feels awful and it sucks, but it's not from following the TA.
Anyone who has followed the TA would be psyched today.
Who is upset today are the folks who've been trying to "call
the top" and the folks who've been pining for the mythical pullback
(deep). This happened in March as well and anyone who got
sucked into that instead of just following the TA had that sucky
feeling then, too. Every trader should remember that sucky
feeling when it happens to them, which sucks, but use that feeling
to remember for the future not to fight the trend.
Counter-trend sucks IMHO.
Posted by eoberlin1 on 23rd of Jul 2009 at 12:48 pm
Very well said. I happen to think that the AWESOME amount
of liquidity that has been thown at the global economy is going to
trump bearish charts. I think the markets are on par for becoming
extremely irrational.
If the chinese recovery starts to look V'ish this will induce
panic buying.
The trend is your friend until it is not.
Forget all future projections. This could go on for a long
time.
IYR Short (SRS Long) Hurts!
Posted by sethbru on 23rd of Jul 2009 at 11:27 am
FWIW, I am more of a fundamental mid-term investor than a short-term trader. Consequently, I shorted IYR long ago (like going long SRS) since CRE is doomed long term. These continual losses on that short are eating away at me. I am really feeling the short squeeze. I know, TA should have told me not to short it long ago, but I did - I don't know how long I can resist covering.
IYR
Posted by bkout3 on 23rd of Jul 2009 at 11:36 am
Maybe one possibility -- 33.05 was the previous swing high -- could cover here and re-enter short if IYR goes back under that level or breaks the 50MA (red) or 200MA (blue) both around 32.60 now. Your call obviously but waching losses mount is an energy drain -- I've done it too often myself.
You may in fact be
Posted by steve on 23rd of Jul 2009 at 11:36 am
You may in fact be correct over time concerning the fundamentals BUT the technicals give you an indication of when to enter and exit. Many thought the same thing about the internet stocks in 1999 and 2000 and shorted them based upon the fundamentals. While they were eventually proved to be correct, many went BROKE because they ignored the technicals and shorted too early. When you make a trade you need to adhere to risk management which NEEDS to be set at the time of entry and not adusted along the way. Currently, the intermediate trend is up and we won't be looking to play short until it changes. Don't try to pick tops.
In line with not picking
Posted by macbeth on 23rd of Jul 2009 at 12:00 pm
In line with not picking tops, I guess it's not a good idea to jump into the market now that I've just got back from an early appointment with the dentist's and just seen the market situation !! Ten to one, if I bought now, the market would roll-over ! I'll just watch and wait.
I Learned my lesson..... I've
Posted by jguerette on 23rd of Jul 2009 at 11:41 am
I Learned my lesson..... I've done well with the mechanical systems, will stick to that!
I feel your pain.... I
Posted by jguerette on 23rd of Jul 2009 at 11:30 am
I feel your pain.... I was long srs for a long time and finally just got crushed into submission. That could be good for you as it will probably turn around now that I sold.
I've found that fundamentals rank
Posted by user32 on 23rd of Jul 2009 at 11:49 am
I've found that fundamentals rank right up there with emotions when used to time markets short-term or even intermediate-term. Unless you plan on holding for a very long time (and assuming you don't mind your investments going against you in big ways during that timeframe), it's best to trade based on technicals in the short- to mid-terms, and leave fundamentals to truly long-term timeframes. But even if you choose to use fundamentals short-term, they need to be confirmed by the technicals.
The technicals while important have
Posted by randall68 on 23rd of Jul 2009 at 12:18 pm
The technicals while important have not been much help since the March low. If you were bearish, many indicators have been overbought and stayed that way, most of the formations including head and shoulders, rising wedges etc never panned out. or worse yet trapped you into going short. If you were bullish and followed the technicals once again you didn't fare that well as many times bullish formations broke down. If you acted on the breakdowns and sold, then you were sold out only to watch the market recover from the breakdowns. The only real way to make money was to buy and hold. The more you paid attention to technicals, the more you risked getting stopped out of your bullish position.
I agree with you.
Posted by sahand on 23rd of Jul 2009 at 01:49 pm
I am a retired radiologist. TA like radiologist in medicine that thay don't treat pt. directly, look at a lot of charts and speak from both corners of their mouth to cover the basis and make us more confused. i have been with this site for more than a year. look at the watch list, thay got out of SSO on march 22. I missed this uptrend move and Chopp CHOP my portfolio. You may want to look at www.timerdigest.comand follow the consensus signal for long term investment.
The watchlist is simply a
Posted by steve on 23rd of Jul 2009 at 02:04 pm
The watchlist is simply a list of trade ideas - what in the fundamentals told you that the market was going to turn in March? Come on - being an arm chair quarterback is no way to frame an argument. Please support your thoughts with some analysis. While we may have taken off SSO early on the watchlist, we HAVE CONSISTENTLY said that Primary Wave B was likely to retrace approximately 1/3 of more of the decline. We are far from perfect but if playing the watchlist did you also play everyone of the other picks? How would that compare to just holding the SPX?
Steve/Matt - I think this
Posted by kkeshav on 23rd of Jul 2009 at 02:17 pm
Steve/Matt - I think this has been suggested before, maybe a buy/sell signal in the premium section will be helpful for intermediate term investors. This way they do not need to worry about daily noise.
That would be so welcome.
Posted by poohnana on 23rd of Jul 2009 at 03:02 pm
That would be so welcome. I really would love more swing trades. Thanks
lol....this is getting fun....
Posted by dylan398 on 23rd of Jul 2009 at 01:56 pm
lol....this is getting fun....
If one is following the
Posted by junkmaylbox on 23rd of Jul 2009 at 01:55 pm
If one is following the consensus, one is always late. The primary trend reversals were very obvious after 3 days for me. There is no need to turn reality into a picture of reality, and wait till majority agrees on it.
randall68 - One other comment; back
Posted by matt on 23rd of Jul 2009 at 01:38 pm
randall68 - One other comment; back in March we gave a target of 1000 - 1120 for the SPX. Now the intra day updates on the blog and nightly intra week updates are NOT geared toward managing your 401K, they are for swing trades and the short term trades. However we cover the intermediate to longer term trend on the weekends and backin march we gave a likely target of SPX 1000 then or higher; that is playing out. I suppose you could have bought in Long and just held. However our intra week stuff and the blog stuff is geared for timing the short term movements etc.
validity of buy and hold till reversal occurs
Posted by junkmaylbox on 23rd of Jul 2009 at 01:37 pm
A good observation: buy and hold is perhaps the only strategy that works well on the markets this year and since the September breakdown last year. Reversing directions is sometimes confusing, yet after that holding on is pretty straightforward. I wonder why it's the case. This is my first bear market to watch.
junkmaylbox - agian it depends on
Posted by matt on 23rd of Jul 2009 at 01:46 pm
junkmaylbox - agian it depends on your time frame. If you are a short term trader and short term swing trader, then no buy and hold will not serve your objectives. One of my trader friends sometimes makes $100K or mor a day trading TF futures, obviously a buy and hold would not interest him. Now If you work a job and can't follow the market; well then just play the intermediate trends. It depends on you and your time frame and trading style.
I concur. With a full-time
Posted by junkmaylbox on 23rd of Jul 2009 at 01:59 pm
I concur. With a full-time job, doing day trading is virtually impossible :( So intermediate and long-term swing trading are the options left.
That's not true. You can
Posted by algyros on 23rd of Jul 2009 at 02:03 pm
That's not true. You can day trade one of Matt's mechanical systems robotically.
Can anyone help setup the
Posted by johnc4b13 on 23rd of Jul 2009 at 02:10 pm
Can anyone help setup the mechanical systems on Tradestation?
That is a totally false
Posted by steve on 23rd of Jul 2009 at 01:11 pm
That is a totally false statement - the technicals told you that the market was bottoming in March and to prepare for a turn in the PRIMARY TREND to the upside. If you are a true swing trader, you would have remained in this entire advance based upon the technicals (since swing traders allow for deeper pullbacks). During this uptrend their have also been pullbacks that were identified by the technicals if you chose to play as well. Not everyone is a BUY and HOLD swing trader. Just line up your objectives with the technicals representing the proper time frame. The short to intermediate trend on the SPX changed after topping out on June 11th telling you to be cautious (short would have been no lower that SPX 928) and then reverese last Wednesday (SPX 912 area but still below 928). So you could also have profited from the decline and reversed long ACCORDING to the technicals. Simply put, match the proper time frame to your trading objectives. Those who simply buy and hold are still down 40% from the October 2007 highs.
thanks for the strategy
Posted by junkmaylbox on 23rd of Jul 2009 at 01:47 pm
Steve, Thanks for outlining a modified buy and hold strategy in precise terms. Buy and hold means only for the duration of the current intermediate trend (the major trend is down).
Randall
Posted by jcomptonod on 23rd of Jul 2009 at 12:50 pm
You are missing something. First, not everyone trades on the same time frame and not all of us trade the same, anyway. I use the technicals to find my spots and am more of a position trader, except when the market is in a trading range, then I am more of a short term swing/chart reader trader. I have been mostly able to stay on the right side of the market, while avoiding big risks. Buy and Hold had been proven pointless simply by looking at the chart between 2000 and now. This is a technical analysis site and we use our techniques to give us an edge over those of you that don't. Stick around awhile and you'll learn how. all the best, john
Click on the chart
SPX long term
TA Has Been Very Useful
Posted by trade_happy on 23rd of Jul 2009 at 12:41 pm
Since the March lows we've been in an uptrend. "The Trend is your friend" is not just a cute, rhyming cliche. And in his excellent book, Trading For A Living" Dr. Elder emphasizes that in a trending market there's really no such thing as overbought - it's not a reason to short, it's just a reason to take some profits or start to watch more closely.
The first day we closed above 875 the TA from earlier 2009 told us 875 might be shelf support, which it was: May 13, 15, 21 June 23... July 9... And in our updates we've constantly been discussing a target for this late summer/early fall of around 1000.
If anyone missed this move or got short-squeezed, I know that feels awful and it sucks, but it's not from following the TA. Anyone who has followed the TA would be psyched today. Who is upset today are the folks who've been trying to "call the top" and the folks who've been pining for the mythical pullback (deep). This happened in March as well and anyone who got sucked into that instead of just following the TA had that sucky feeling then, too. Every trader should remember that sucky feeling when it happens to them, which sucks, but use that feeling to remember for the future not to fight the trend. Counter-trend sucks IMHO.
Very well said. I happen
Posted by eoberlin1 on 23rd of Jul 2009 at 12:48 pm
Very well said. I happen to think that the AWESOME amount of liquidity that has been thown at the global economy is going to trump bearish charts. I think the markets are on par for becoming extremely irrational.
If the chinese recovery starts to look V'ish this will induce panic buying.
The trend is your friend until it is not.
Forget all future projections. This could go on for a long time.
Just follow the trend and
Posted by steve on 23rd of Jul 2009 at 01:17 pm
Just follow the trend and DON'T make assumptions about liquidity, etc. If the trend remains up you will be along for the ride - simple as that.
You guys should workfor CNBC..."awesome
Posted by dylan398 on 23rd of Jul 2009 at 01:06 pm
You guys should workfor CNBC..."awesome amounts of liquidity"
+100!
Posted by PA on 23rd of Jul 2009 at 12:10 pm
+100!
Excellent feedback - I agree
Posted by steve on 23rd of Jul 2009 at 12:00 pm
Excellent feedback - I agree completely.