WE ARE APPROACHING CRITICAL MASS
As can be clearly seen on this chart, the huge divergence in the POIV continues to build as price makes new highs and it lags way behind. I sure wish my new little toy was in the sell zone here, it would be a bet the farm short. We rarely have everything especially with the SP 500 which is the hardest market to trade. I think it is because all the small fries are in there trading one lots and making it very choppy intra day. I have not changed my view in that I am looking for a decline here to start any day now. I think we should mostly trade sideways to down into March. Maybe if we are lucky my toy will drift down into the sell zone while we are moving up here, that would be ideal.
As readers know I am working the short side in individual stock trades for a couple of reasons. First and foremost, I have my indicator in the sell zone for the most part in many of them. There are a few buys that are not being confirmed through my filtering process, but by and large the majority of possible trades each day are sells. Second, I have an overall cyclical and seasonal down bias here, and I am honoring that since we have followed it pretty well the last year. I like following seasonals until they veer off course. Of course we never know in advance when it will happen. We also never know in advance when most things will happen. Who would have guessed it would be 90 degrees in San Diego Jan 5th of this year? It was.
We also had a potential dollar break out upward today, although there is divergence at hand in POIV there also. If it quickly reverses it could have been a trap. I don't think it is simply because it is going to be the flight to quality spot when Europe implodes, and that will happen sooner rather than later.
My COT tool is not quite into the sell zone, but could be there tomorrow. Also we have not quite broken out to new highs maybe that will happen Friday. If it did, then we would really have more of a trap reversal pattern formed. It really isn't there yet since we have not closed above the recent highs. This bears watching and I certainly will be doing so.
The only new stock trade I have for tomorrow is CTAS, so I will be trying to get short there tomorrow at today's close or better. The exit for the SHAW trade tomorrow is a close < 27.12. We can watch these two live and see how they work since I am in SHAW now and will be in CTAS Friday unless it gaps down big.
It is starting to look to me like we are about to start heading down in many places in my short term indicators. For those who are bullish in commodities, I think we need to hold here if we are going to hang on. There are many markets setup for buys based on COT stuff, but often commercials are way early on getting long so I personally need more than that to fight a trend and look for reversals.
I did take a shot at Hogs on the long side this week and got stopped out for a loss. Fortunately for me I put half the trade on and tried to enter the other half on a dip the same day which never came. This was a judgment call but I just was not completely thrilled with the bar pattern that I entered on so I held back some. As a result I only had half my size on when I got taken out. I love it when that happens! Small losses please me almost more than big wins.
That is all I have for tonight, doing these posts from my notebook computer is a pain in the rear from an editing standpoint, so I have to keep them shorter. I hope to have my tower computer back by tomorrow.