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We all face risk as traders. No one knows what a day is going to bring (unless you are one of the big banks, in which case your profits are assured by government fiat). But for us little guys, we have to do the best we can with the tools and skills available to us.
The week ahead brings more risk than most weeks. I won't even go over what the risk events are; you've heard them all countless times. Suffice it to say that it's going to be wild, dangerous, and – at times – scary.
FYI, there have been a few recent bearish "Death Cross" moving average formations on the Daily timeframe, as shown on the chartgrid below. They are:
For the first day since Thursday last week, the lower bollinger band on SPX was not touched as support yesterday and that looked like a clean break towards the upper bollinger band. That's currently just above the 1340 resistance level and I would normally at this stage expect that to be touched, or close to it, before seeing another break below the middle bollinger band:
Before we get serious, let us laugh out loud seeing the sheer stupidity all around and how the market is moving like drunken sailor with a bottle in hand. My apologies to the drunk sailor for inappropriate comparison.
Given the action in the last hour of today's trading, the notion of going completely flat ahead of the almost assured 72 hours of complete insanity that will encompass next Monday, Tuesday, and Wednesday is looking increasingly alluring.
The tension in the market is almost palpable. Each side is trying to wrest control from the other. An hour before the close, the bears were getting the upper paw. The latest bailout rumor, however, snatched control away from the bears and put it back into the hands of the bulls.
So, since Sunday, the market has been UP (Sunday), DOWN (Monday), UP (Tuesday), DOWN (Wednesday), UP (Thursday). Anyone want to guess about tomorrow's direction?
In any event, I am 40% in cash, and my positions are split about 20% bull (all energy-related) and 80% bear (all tiny individual equities).
I think I'm going to work on a new SocialTrade video this afternoon, because I want to bring the introductory video up-to-date with all the new features. I think this will be my last market-related post of the day.
