I have never done this before but I feel compelled to do so right now
We have just been sailing along nicely here for quite some time, it has been solely done by the government, but so be it, one helluva rally has taken place. I really had not expected any flies in the ointment for quite some time, then all of the sudden yesterday happened. Recent Larry Williams seminar attendees will recognize the pattern I have marked with the arrows in my timing indicator. Although as I continually state, this is not his indicator, and does have different values, the pattern is still the same here. Please no questions on this, I will not explain what it is. However what I will say is that it is a sell signal. It is a bigger picture signal, so we need something more than just this to sell short. You can see we are technically under the Trend line which is the orange line. I will not get into the specific reasons as to why this is a sell, Larry's students who read this will know that. If you are not a student, you are just going to have to take my word for it.
Fridays low has to get taken out for the entry, so if we just sail up from here, this will be nullified. However, we do have somewhat of a trap pattern here, and actually the correct market to short is the Russell 2000 which has not taken out the recent highs, and has actually made a lower high. That is where I will be trading Monday. If we couple this with the following chart, we begin to see a consistent picture here.
Here is the Dollar Index. There were some shenanigans late Friday with the electronic pricing, I have no idea if that plunge is even legitimate pricing. I looked at 1 minute charts and saw alot of trades so I suppose it was, but it happened at a time during the day when price normally does not trade at all and none of the other currencies did anything, so I think this was a keypunch error etc.. Even if it was not the market is still setup for a buy, and since we know stocks and the dollar index trade opposite nowadays, this makes sense.
There are also sells in energies, individual currencies, and a couple of the grains. In summary we appear to have what might be a very unusual selling opportunity, and something that could move down very fast. We know the PPT is trying to artificially keep all prices on the rise, so that is the fly in the ointment. They are likely to throw untold amounts of money into this if we get going down to try and stop it. However, we cannot control that. These are textbook signals for me, and ones I will play whether I win or lose. Opportunities like this do not come up very often, and it is why I sent this out Saturday. It will also serve as my Monday post as well. Keep in mind these are not sell at the market, you have to use whatever entry techniques you use to trade with and of course protective stops. One last chart I wanted to show is Copper, a market that very closely correlates with stock prices. Blogger is not allowing me to upload right now, you can look at this chart on your own. Notice how it is a bit weaker than the SP500, which could be a leading sign of some coming weakness.
This situation kinda snuck up on me, and we certainly know from CNBC, there is nary a bear in the world right now. A move down would surprise alot of people, millions literally, so that is why I really think this is worth a swing and why I will be swinging if Friday's lows get taken out.