Tuesday, July 7, 2009

Woah, hold on there Tonto.

and there it went....don't chase it. Another will come.....

Was looking for minimum of 890spx and within 3-5 trading days time, from back on last Wed evening, when we were trading at 925spx.
......Well here we are now @ 881spx.......3 trading days later.

Call the catalyst what you want to, to me the MAJOR player was QTR RE-ALLOCATION.

That now makes the last 8 of 9 times the vix and spx were both up in the same day, the NEXT day was a down day. (and most of those 8 were ugly too!) That is the same link/stat from Cobra's blog, I posted last night.

To me, this mini-swing trade is pretty much over now. It's done.
(too short term oversold to want to continue to push it here)

I would still rather overall market wise short a bounce rather than to buy a dip, but I prefer to PASS on either for right now, and just wait for the pitch to get very nice and fat again to trade it heavy. Remember, they have defended 875 very VERY aggressively before, so I will not blindly assume "this time it breaks". I respect that number as a bounce target, as it has proven it has been before already twice prior.

I still think TIN will see 8.00 this month, I still think GMCR will see 43, I still think goog will see 350, but not in a total straight shot line.

Maybe I have an unintentional bias here b/c I have been short w/ July puts the past 3 days and just closed out all my positions today totally. So to me, the trade is over. When you get 3 day moves like that, you just have to ring the register. This market has NOT been super swing friendly for a while, more of a daytrader and scalpers paradise of late. If I rang the register too early, oh well....but ya just have to, IMO.

Regardless what anyone says, IT IS TRUE that subconsciously 95% of us will chart and think in the direction we hold. Of course we took that position b/c of a leaning. However, in this market after 3 days in a row like that, if you not at least letting HALF way off the gas, you are asking for it, imo. I'm neutral short term now. I don't see a catalyst perse, however there are 2 sides to every story, and it's not that i expect. (but i could very well see it happen). The media now do its fade to the initial reaction and Tomorrow something like....."Obama, is prepared to do anything or nothing....he is just open to many things, that does NOT mean stimulus coming!"...whatever, some kinda reassuring thing. Not that I would expect the market to RALLY super hard off that, however I would expect it to NOT go lower more than likely.
That's the news side of the house, psychology side of the house.

Technicals: I think the better trade is STILL to short the pops MORE than buy the dips, there is no change to that to me. However, the key is to short the POPS...(so to me again maybe i am bias b/c i have been short the past 3 days, but this is NOT the ideal entry right here)
Kenny made a good point on one of his last blogs, and I agree 100%. As vix traders will be aware, when the vix gets close to the EDGE of its 20EMA envelope, pull off the juice then. I think vix 35 is possible short term, but I also think that is where i would defiantly peel out of the short side.
My game plan has not changed, its just that the best entry is after a POP...not after 3 down days.
I am sticking to those key NUMBERS that I outlined a couple days ago on the 5 separate indexes, as the major support levels.

I actually think LVS is tempting to a close spec buy if it gaps down tomorrow. (as in for a 2 day quick swing) The chart to me says that the momentum is drying up very much to the downside and 6.60 is the 50% retracement from the entire move up. Again, nothing fundamental...but remember the stocks that go up the most on those OUTLIER up days in the middle of a down swing are the biggest clunkers and the most heavily shorted! (ie insert your favorite heavily shorted...short squeeze play of choice) LVS catches my attention b/c of the 6.60 is again 50% the entire retracement of the move up. So i think it has a chance to bounce from there, for again a 1-2 day kinda play idea, that's all. Not calling it here long, (its conditional) but If the market goes down even more tomorrow, and it rests on 6.60 lets say and bounces around there...It's a buy then to me till the close on Friday. The chance of that set up coming are low, but waiting for the better ones and not settling for the "ok" ones is the whole idea.

Edit: forgive me for saying "3 down days", as Tue many will say was an up day (spy/indu)...just all the stocks on my watchlist and that I trade short were down, as was the russell, and those were the ones that I was watching. Yes Tue was an up-day for the indu/spy, but to me from trading we just had 3 nice down days across the board.
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