Slope of Hope Blog Posts
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Although I took profits off the table on a variety of large six-figure positions today, all of my small positions are still very much in place. There is still a lot of potential in many of these positions.
Looking at the NASDAQ Composite, you can see how we spent three months fighting our way back to the tinted blue zone (which is where all hell broke loose last autumn). We got back up to significant Fibonacci retracement, and then we started pulling away, only falling hard today. I've tinted in yellow the ~100 points left I think we're going to fall before real stabilization might take place.
I haven't been as aggressive on my gold bearishness as I could have – – for instance, I was short GLD, not GDX (which tends to be much more volatile). GDX got absolutely whacked today, and it's clearly broken its ascending trendline.
As for the S&P 500, we're meandering down to 880 or so. At that point we may bounce between 880 and 920 just to torture bulls and bears alike. A break below about 875 would make heading to 800 a definite possibility.
I find it interesting that recent action in XLF – the financials – is virtually identical to what we saw last December (and we know what happened after that.)
Days like today are what I live for, and they make the waiting worthwhile. Congratulations, everyone.
Wow, what a terrific day! I only have two complaints (because, naturally, I just have to complain):
- I wasn't as fully invested as I could have been; I've got seven figures of buying power laying around, and on a day like this, of course, I'd prefer to have every penny at risk. At least my personal account, which is strictly puts, was completely committed.
- Late in the day, I tried to hedge against a possible PPT play by going long /ES and IWM; I closed both of those out, each for a couple thousand buck loss. Oh, well.
I think today was the best dollar gain I've had since February, so I am absolutely delighted. I am particularly pleased at the hammering that precious metals received, since I've been loudly bearish on gold (drawing out everyone from the Divine Church of Precious Metals to tell me how wrong I am).
I'm being interviewed in a few minutes, so I'm going to bow out, and I'm going to have some family time the rest of the day. I'll do a post tonight.
Hearty congratulations to all the stalwart bears who have suffered all the fraudulent nonsense these past three months and are finally retaking control of the market. Your profits are well-deserved.
In dollar terms, this is the best day I've had in months. And the beauty part is that this kind of trading is easy – – I just go through my positions and tighten up the stops.
To be safe, I've taken on a long position in /ES (20 contracts) with a stop below 892. We might firm up from here and get back above 900. But in the coming weeks, we may carve out a right shoulder in a pattern which has already completed a left shoulder and a head. A break below the neckline at ~870 would send us down below 800. It's worth keeping in mind.
There are an abundance of great trades out there. One I'll mention (on which I bought puts this morning) is Devry (DV). I've got a contingent stop on this above 50.99
I will note here that I have taken profits on all my big bearish positions – – I still have 143 positions, virtually all of them bearish, but the big boys I have taken out since we might be at a modest level of support on the /ES right now.
Well, the bulls are suckling from the hoary teat of failure this morning, and it couldn't happen to a nicer bunch of lads. I confess that I sold my ERY long, GLD short, and part of my TWM long a little while ago, but on the whole I am closing out only two things:
In other words, I'm leaving everything else open, albeit with increasingly unforgiving stops.
With the /ES down nearly 20, we seem to be at an important retracement level. But, just to keep beating a dead horse, I think 880 is just around the corner – – – then the real juncture is before us in terms of core direction.
There is no need to say anything more complex than this: the graph below isn't bullish. It shows what might have been a wonderful breakout for the bulls end up in failure.
To my eyes, a move toward 880 on the S&P is virtually a foregone conclusion. When we do get to 880, the bulls should be wringing their hooves over whether that level will hold. If it does, we'll just chop around between 880 and 920. If it doesn't hold, we're heading to 800.