DAMMIT THEY WON'T LET ME HAVE ANY FUN!
Just when I get myself into contention for a TV gig on COMEDY CENTRAL this had to happen! My joke does not look so funny now, and fewer laughs are coming.
We have another attempt by natural market forces to knock the market down and the dollar up. Soon we will have the monsters vs the aliens situation once the PPT gets to work at 6:30. They don't want even a down 5 minute bar, so this again is must see TV. They have not allowed the other team even a first down in the last several months. Will they get lazy and go into a prevent and let the other team move down the field a little bit?
Robert asked a question about a strategy of just buying 1 to 2% dips and using a volatility stop. That has absolutely been the best way to have traded this market the last year and a half. Just using a %R type of situation is always a great way to trade runaway markets. The losses of course come when you either get deep pullbacks or the trend changes. No strategy is perfect. Keep in mind that even doing that you would not have had many opportunities. Really strong or weak markets do not pull back much. This makes them tough because we get used to more choppy action, then along comes a trend move and you have to be a little less picky on them. Of course we don't always know when a trend move is here or over do we?
Many of the traditional ways of looking for reasonably accurate reversal patterns have completely been blown up in the last year. If you are a Fibonacci trader just try and get a dollar for every resistance level that has failed, and retire.
The main indicators I use to trade, are not giving me a sell entry in the indexes yet so if we are going to have a decline here, the way I will be in will most likely be on a bounce after a break. I am playing it though via long the dollar as you can see above. I am also short the EURO, but that is basically the same trade. I have the bet split up between the two. If the SP 500 is going to decline, the dollar will rise, and I did have a valid buy signal in the dollar overnight so I took that.
Here is another market I really want to short but have not as of yet. The one thing people can learn from me is that you should not be too overly excited shorting against big trends. The situation has to be just right. You have seen many trades in here where I have done this successfully especially in the metals, but it is very difficult to do. This next chart of Soybean Meal has the makings of a top, but in my view the price action does not match the technical stuff yet. Do not force these types of situations. If you miss a big drop right off a multi-year high so be it. I have been run over too many times in my career trying to step in front of things like this. However, this has a 3 point divergence so if I do get some type of a false breakout trap type of pattern, I will go after this one. So far there is not one.
Many of the grains have this triple divergence pattern here, but the trends are so strong. This pattern is very powerful and often leads to big moves, so I am watching this closely to see if it comes into line with the divergence.
Good Trading and hopefully the PPT will save with COMEDY CENTRAL negotiation.