Slope of Hope Blog Posts
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It may sound ironic (or even masochistic), but I'm actually more optimistic than ever about the prospect of a resumed tumble in the market. I lost money today, but only about half what I made yesterday, so over the past two days, I'm still in good shape. I also managed to preserve some profits by exiting my SRS position earlier today, since it seemed uncharacteristically weak. I trimmed my FAZ position in half, since the strength in the financials is holding up better than I imagined.
I noticed that for both the $INDU and the $TRAN, today's high price butted right up against the underside of a major Fibonacci retracement level. This retracement series spans 1974 to 2007, so it's definitely the biggie, and it's acting just like it did around January 6th of this year when it peaked. Here's the $INDU:
The 800 level on the S&P is within spitting distance. If we charge right past it, well, I guess maybe the countertrend rally we've all been waiting for is really here. If we get a meaningful failure around that level, I think we could ride the S&P back to the 730 target.
It's important to keep an open mind to the markets, even when an insight may be contrary to an existing position. I have a bunch of FAZ right now (double-bearish on financials), but its dopperganger symbol, FAS, looks like it might have done a clean breakout above its descending channel.
A move above 5.90 would be bullish for this vehicle. For myself, my FAZ stop is quite predictable – – 32.56.
Here are a variety of short ideas with my own stops: