YOU ARE EITHER INSIDE OR YOU ARE NOT, IF YOU AREN'T GET THERE!
As yet another scandal with a politician broke yesterday, the above thought occurred to me. Here is a guy who is in such a liberal district he will never be voted out of office no matter what he does. Why would he resign? He is inside, he cannot be harmed. Our society is setup to protect those who are "inside." What is it with these guys sending pictures of their Johnson's out, I just don't get that. We see one example after another in life where the people that are inside get taken care of and those who are not, get left to fend for themselves. This is the way of the world, get over it. I don't like this type of crap any more than anyone else does, but I also realize fighting it is pointless. We see the same thing in corporate America every day, friends take care of each other. It is what it is. My group of players at our club has tee times protected for us on Saturdays, even that is an inside deal. What does this have to do with trading?
Fighting momentum is akin to fighting inside dealings, it is pointless. We have some incredible divergences in place on the chart right now that say this market should rally. However, the tape action is just awful all the rallies are being sold. The insiders whoever they might be, are pushing this lower right now, and one of the things we have seen is that when the stock market declines so does everything else with a couple of exceptions. I read a very prominent trader the other day state not to get used to these correlations, because they will not last forever. Well for my money 2 years in trading is forever, and that is how long they have already lasted. I see no reason not to be aware of them as I state over and over in here. If for no other reason just for risk purposes and position sizing.
Based on what I have displayed above, we should be looking for buy signals, but I just do not see one at this point. All I see is just one down range after another, and pretty negative short term momentum. I do expect this sucker to turn back up here, but it has not yet done so. Until it does, I think we have to be careful on longs. Being long anything is no good, when the Bernanke 500 is going down, and vice versa. What we have to see if a down side move reversed intraday and a strong close to get this going back up again. Once we see that the momentum train could leave the station quickly, but until then it is still down.
The one oddity here is the Dollar Index. It is going down with the Bernanke 500, they way it used to correlate in the good ole days.
I have been long in some individual currencies the past few days, so this has helped me some. The one thing I see that is interesting is the accumulation/distribution indicator making new lows ahead of price. This is not always that ominous, at times it can be an indication of exhaustion. However, the trend is still down on all time frames here. The fact that it has not rallied in the face of the recent stock decline is not a good sign for dollar bulls if there are any left. I suppose it is the contrarian play to buy this since the world from every 4 year old to every grandmother thinks this is going down. However, you have to be careful being a contrarian. There is no magic answer as to when and when not to be one, but at this moment it does not appear to be a good spot to be one here. For me there has to be some really prominent divergence to take a shot at the long side here and I just do not see any yet. I suppose if we took out the low of the year and reversed on the next day it might be something to take a swing at. That aside, if you just looked at this chart and knew nothing what would you think? It is going down... Hello...
Sometimes we all myself included get too damn fancy with ourselves. Here is one new trade I am looking at, Hogs. You can see I have an alarm on the chart where the arrow is indicated. I may try to buy a pullback intraday if we trade through this price. There are alot of divergences in what I look at going on here, enough so to try and play the trap new low reversal if it happens.
There is nothing much else for today that is new other than I am grinding out my day trading trades. Yesterday there were very few that generated but that is ok, I just follow the rules and when the trades are there I do them and when they are not I sit. I am also looking for an energy long to develop here any day now.