TO SELL OR NOT TO SELL?
Well I have to say this is a tough call to make here. On the plus side we do have the trend indicators saying down, but they have been saying that for 2 months and been wrong. We also have some divergence in the Pro Go indicator up here. We do also have the dumbest president in history talking alot which has often been a negative for the market. The VAT is a country killer, and if he gets that through there will be no reason to be anyting but short until we hit 3,000 in the DOW. That will without any doubt ruin this country and create a depression. How many people do you know that live so fat that they can afford to pay 17 to 20% more for everything they consume but food? I do not know many. It will bankrupt 100 million people overnight literally, maybe more. The sad part about it is that it appears that is his plan, that way he can control the masses. I can only imagine what history what write about this dude 100 years from now. I am sure it will be along the lines of the man who single handedly put the country on the brink of ruin.
That has nothing to do with today, but it is part of the background that has to be considered now that we are reaching into price levels that could be major turning point numbers. Also, yesterday was a reversal bar. Contrary to what many write, these are not great bars to sell below. I trade them at times, but usually try to avoid them unless everything else is perfect in a setup. I lose more than I win selling below or buying above reversal bars. I have caught some big wins doing so but I really hate trading them. I do like selling below up reversal bars that reverse back down the next day and that is what I am hoping for today.
When I look at individual stocks now after the few days of rally, I do not find many that appear to be ready to go down based on my patterns. Also, the NAZ is not setup pattern wise for a sell with my methodologies. Also I don't think the Russell is either and it has been the strongest over the last week making a new high when the others did not. I think what you do here depends on your big picture plan. If you are rally chomping at the bit to short this market, then you have to keep playing these setups until one hits. I am not of that mindset, so for me I am not going to short this today. I am going to hope the PPT saves this and reverses it back up as they have done so many times. Then if that happens I will sell tommorrow below todays low or thereabouts. I also do not like the fact that this price action is well above the trend line I have drawn on the chart. This would mean that we could move around for a few days above that line and still be in an up trend. I like the breaks to break trend lines on the day of entry if at all possible.
I have no idea if we will get a reversal bar back up or not. We have seen the PPT very active in the last hour on a consistent basis, so unless we get a day where the horse gets out of the barn early and big, we are not going to get a big down day. We need volume to overcome these manipulations they are doing with the late day buy programs. Keep in mind they could just as easily be doing it through big firms by guaranteeing the money to them on any losses as they could on doing them directly. However, what we do know is that there is probably an 80% probability that the last hour of the day will close quite a bit above the hour that preceeded it. That is a tremendous edge to have on the long side, and a very tough one to fight on the short side.
In summary, I am not shorting this today. I do have sell orders in for the British Pound as per the setup I posted yesterday as well as Sugar buys above yesterdays highs. I am also looking at Silver on the short side. I am not going to short the SP 500 today other than on a day trade if I see something. Early on here it looks weak but we have seen this before and it has not lasted. Volume will be the key. Will there be enough and consistent enough throughout the day to have a down close? Will the PPT save this once again? Below is the conclusion of my ABT long, which took away about half my profit yesterday before I got out. I did have a stop below the prior days low to take profits, and that was hit basically right on the open. Still a profit but half what it was going in. So be it, they do not all work out the way I intend. Still got a grand out of it, so I can pay 1/3 of my next vet bill with it!