Saying I told you so is a trite move for anyone to make, but it is appropriate today. I mentioned yesterday that the mistake the Fed has made is that they have artificially manipulated things to such an extreme, that they had set the bar too high. It had set the stage for a disappointment at some point and I thought that time was near. As I peruse the markets overall this morning, this very well could be the largest down day across the board in history developing. I had also mentioned that all of the recent setups I had discussed were still in place, so I hope some of you have caught some of these moves.
I exited my Soybean Oil trade I have been discussing in here yesterday at the nearer of the two targets I had displayed. Of course this morning due to the overnight melt down, it is tanking and is way below my 55.40 exit. As much as this is a bummer, that trade was still a good trade. When you use targets they are just that, and when price reaches them you get out and say thank you. I would venture to guess that 60% of my trades do not reach the targets and I get hit on my trailing stops along the way. The goal when entering the trade is for it to hit it's target.
Here is another setup I had alluded to that I was watching, Live Cattle. You had a number of opportunities up here to get short depending on what triggers you use to play ball with. This just like every other chart has moved a good bit since I captured the picture and is looking good for anyone who is short this market. For that matter you can short anything except the DX and Bonds in periods like this and make money.
Speaking of the DX, here is that chart and this market has also exploded much higher than this overnight. I had made the note on the screen that the POIV was diverging but might catch up. I suspect with what is happening now it will. This is an example of a market I had pointed out as setup market for a short. It still is in terms of what a setup is, but setups are setups, they are not entries. There has been no sell entry in my world here. However, if you wish to ding me on this as being wrong that is fine, guess what, sometimes I am wrong! I had also said that Bonds I thought were setting up a potential top which they still are but again, there is not a single sell signal on any chart I look at yet. I also mentioned that the flight to quality would be here if we got an equity crash. We have an equity crash now.
I also had mentioned recently that I thought catching the next sell was going to be tricky, and it has been. This chart has just been a mess, very choppy sideways action. Fortunately, there have been moves in many other markets, so you did not have to rely on just catching this perfectly. I am not short in the indexes at the moment. I do speak from the heart in here as readers know, and my time of grief over my loss has effected some of my trading. I have caught some moves but not as many as I normally would have. In the case of the indexes, there really has not been a good entry by the techniques I use for a short yet this week.
So what to do now? First, be thankful you are a short term trader and not getting wiped out with some of the moves that are underway that are likely to keep going. This is apt to get a bit scary here in the near term. We are on the verge of panic spot for many people. The economy is not doing well, people are out of work, and now another market crash. The Fed has set this up, so now they have to live with it. It is impossible to know what they might do next to try and save this, but with the volume we are seeing, they are not going to be able to stop this and there is no sense throwing away billions of dollars to try to. I think at some level they know that, but behind closed doors depending on how bad this gets, you just never know.
Next, don't chase these moves if you are not already in them. There will be very sharp pullbacks at some point which will provide entries. The stops are huge in many markets now, so be careful with your money. You do not want to throw caution to the wind. Although fortunes are made during times like this, more are lost. You can go through the recent archives to read the other markets I have pointed out where I thought opportunities were presenting themselves.
Good trading to everyone