I apologize to those of you who diligently read my comments every day for missing a few days. My travel schedule just did not allow me a moments time to post anything at all while I was in New Orleans.
If you re-read my last post you will see where I said if you were bullish this was a buying opportunity. It does appear now that it was and those such as yours truly who were looking for a deeper pullback are going to be proven wrong for the 84,000th time in a row during this spectacular rally. I went in on the short side here, but did it on the light side just due to how insanely strong this market has been. When you have the FED officially stating their goal is to inflate stock prices with QE 2, and it is not due to run out until June, you have to realize that the odds of a really big break prior to then are probably not that good. As a result, I reasoned that even though I had a valid signal, I was going to risk only 1% on the trade.
At this point I am still short but it does appear I will get picked off today or tomorrow on the NFP report. It is somewhat of an unclear read now for me with me primary indicator. The trend in it is still down, but it appears to be turning back up now. When I project in both directions for tomorrow, it does not really give me a clear obvious direction. When in doubt the trend is up, but I am following my discipline and sticking with the trade for what is most likely a stop out loss. I have been perusing individual stocks, and just can't find many that are setup for buys by my rules, so I had nowhere to go for longs.
When I think to myself about what I am doing it is helpful to know that I am following my discipline. I am not trying to short the indexes just because I am a wise guy or some doomsayer. I am doing it because the patterns I use are there. By and large they are not working well in stocks or the indexes right now, but we are also living through a historic period. The rules have all been thrown out the door, but it will not last forever. At some point again the market will trade normally again. I strongly suggest not changing everything you are doing just to fit this. There is really only one other time in history I can find where something similar to this has happened, the late 30's. It came to an end and those who might have been trading then had they just bought every 5 minute bar that closed lower got bankrupted when things changed. It is my plan to stick to what I know, go light on the risk, and hope I get some buy signals. If I get them I will go long, pretty simple.
For now buying even a 30 minute dip just blindly is the right thing to do, but it won't always be.
Here is Crude and the explosion that we have seen. I had suggested that based on COT stuff this might be a false breakout just driven by a news event. There is nothing really here to suggest a short entry except a smidge of minor divergence. That is nowhere near enough for a trade entry. I guess if you are long stay long, no telling how far the middle east stuff could drive this. I do think if that subsides, this will come crashing down very quickly, but you can't trade off such opinions. Net net, nothing to do here for me at the moment.
Here is my next joke for my comedy career, Silver is starting to look like a SELL. Please hold your laughs for the end of my joke. This is quite a bit of divergence starting to show up here, and the other main indicator I use has more than this. I constantly harp about not selling the strong, so I won't short this. However, this is what got me to stay away from a gold long the other day, that would not have worked out so great. Gold or Copper are both weaker, so for the fools out there like me who did not get the memo that the rules had changed, we can look for possible sells here. Oops, wait, small investors determine everything now not big players, so buy, buy, buy. Once again, I am going against the herd here. I do not have entries yet, but am looking now for something potentially on the short side and in the other metals not Silver.