WHAT A DIFFERENCE A DAY MAKES
It must have been bad karma that Blogger dogged me yesterday and would not allow the posting of this chart above. I mentioned in the text yesterday that my COT indicator had reached the sell zone, and today we are seeing an across the board wipe out. I also mentioned yesterday and I will restate the same thing, I have not figured out the best way to use this thing yet. It does pick some moves just dead on balls accurate like this, but at other times it is way early. As with most tools, they area just that tools. You need to determine your own style and how you will use them to trade.
I did find it odd that I was having a hard time finding any individual stock longs to get into during this small little basing period. We are still down now into a price zone where some of the things I watch say to look for a buy signal in the Bernanke's, although it is far from setting up as I type this. Although there was no question you should have been long the Bernanke's going into yesterday, no matter where your stop was you are out now, or short unless of course you are a position trader where you might be stopped below the lows of this last month. I have to admit, the one sell signal I had is not one of the better one's I use so I did not take it. The next chart is one market that I am short, Crude Oil.
Since the world is still one trade basically, this market is going down also along with everything else. Our crazy uncle Natural Gas seems to be holding up the best from the quick gander I took this morning. That market is something else, I love to trade it. It could care less what in the world is going on it marches to it's own tune. I pointed out recently what a great fundamental setup it had for a decline, and it has tanked ever since then so I hope some of the readers got a taste there.
I also mentioned recently that it was time to be looking at longs in the DX and short the currencies, and I was spot on with that. Of course when the Bernanke's go down, so does everything else since this is the concoction they have chosen to create. As to whether this is the big melt down I have been talking about or not, I am not sure yet. Until my short term indicators completely roll over, I am still looking at shorts in the Bernankes into these levels as shorter term trades. If we either decisively break here obviously the game is over, but I still think until we get under these recent lows there is still a chance we are basing for a larger bounce that what we have seen so far. If today and tomorrow close down, yet hold above the recent lows, that will likely be a buy signal for me in the indexes for Monday.
I do want to make one thing clear, any longs I view as short term, I think overall the game is over here for the market as a whole. Whether we bounce first or just roll from here, it is my view that we are going to see sharply lower prices by the fall.