DOW is down six days in a row. For last two days SPX is opening huge gap down and recovering most of the losses by the end of the day. The fight has been going on hold the 1360 line but ultimately it failed today. An important Demark trend line was barely missed by a whisker.
I was pleased to see Cisco getting pummelled after hours, for it is one of my sixty-one short positions. It isn't a particular big position (none of them are, with the persistent exception of FXE), but a 9% drop is a 9% drop.
Although I hadn't touched Cisco in ages, I was intrigued by a very clean gap break and a reasonably-formed head and shoulders pattern. This was strengthened by the fact that, in the past, Cisco has behaved itself pretty well with similar patterns.
With the very large pattern shown on the left side of the chart, CSCO fulfilled its measured price target almost to the penny. With the present (much smaller!) pattern, the price has actually been fulfilled already in after-hours trading, which is at 17.20 or so as I'm typing this. I'm tempted to just cover it now, after hours, but I am really trying to avoid after-hours trading, as my rule dictates, so I'm just going to let it sit until the morning.
THE NUMBER OF OUTCOMES ARE DIMINISHING
The good thing about time and uncertainty is that as time passes, uncertainty also usually fades away. I have found this to be the case in so many areas of life, especially in dealing with the family situation I've been a part of for the last couple of months. I typically like to have a good plan (guess) of what will happen and then I like to make small adjustments to the plan as reality unfolds. I stress out when the number of variables are so large that I can't truly grasp what will ultimately happen. As you get closer to specific dates or milestones, your choices tend to be reduced and your actions are often dictated by one or two choices rather than ten or eleven. Oddly, that has been the scenario we've all been investing and trading in for the last several years. Will we wake up with a "fat finger" flash crash event, will another big black swan hit the markets destroying what is left, will Europe's experiment with the Euro finally be ended? Each day I've wondered how will these events happen and what will the resulting impact be on us. The trouble with trying to really dig into these uncertainties from afar is you'll have so many unanswerable questions and scenarios that you'll drive yourself crazy attempting to create contingency plans.
Originally published on TheTechTrader.com.
These are the results of Europe's ECB LTRO 1 & 2 programs (Daily chart of the European Financials ETF, EUFN)…you be the judge as to whether they have worked.