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VERY BEARISH


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#1 OEXCHAOS

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Posted 08 October 2013 - 08:54 AM

I'm very Bearish. This crew doesn't often get wrong when they're really leaning. We also have obvious support just below. If it goes, it gets ugly. Yes, I'm short for the day trading service. Comments to come.

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#2 OEXCHAOS

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Posted 08 October 2013 - 09:04 AM


From the morning letter:


Late Evening Indicators

Best Trend: Neutral.
CBOE:SPX: Positive. Un-confirmed.
Momentum: Sell.
Breadth: Negative.

Message Board Sentiment:
The message board sentiment poll shows Bulls at 19% and Bears at 62%. This is still Bullish since while this crew tends to be right more often than not, 50% or more is a fade. The Actual Position Poll shows 5% fully long and 25% partially long. 20% are partially short and 30% are fully short. This is well above our 20% threshold and would be modestly Bullish for the market. The Fully Long/Fully Short is technically flashing a Buy. The problem is that we know that this crew, when they REALLY get leaning, tends to be right. We saw this on the upside when they get 500% or more Bulled up. Well, they are essentially 600% Beared up. They're likely to be right. The 5-day is neutral. The large number of partially long Bulls isn't good either. Bottom line, this data suggests support fails. It could be ugly today. Use extreme care on the long side.

FLFS10_08_13.gif


If you'd like to check out these poll results real time, the polls are pinned at the top of this page: http://www.traders-t...php?showforum=2



Conclusion
Last time, I said that I didn't see any pessimism ramping up, at least in the options. Given the damage that was done, that's bad news. We also noted that we were right on support. Multiple support lines. Everyone has to be looking at them. If they go, things get ugly, fast. Now, there are forces that don't want the market to fall apart. But there are also forces that want the market down for political reasons. The news can really move things too. That makes things risky. Here's the real kicker. We've got another one of those situations where the message board folks are leaning hard. They tend to be right when they do. It may not be today, but then again it might. Certainly the odds favor lower prices over the coming few days. With support right here, that implies a break. Worthy of consideration, for those who do such things, is the purchase of puts a bit below the market. That cost will likely be sunk, of course, because of the way options trade, but if I'm right and they cream this market, volatility will spike and the options will benefit from both the movement and the expansion in premium. In any case, we need to be very careful in here. There's a lot of risk to both Bulls and Bears. The Bears have the ball right now, but it's not going to be all one way.


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#3 TechMan

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Posted 08 October 2013 - 09:13 AM

For day trading, this opening dip should've been bought. It's free money Tuesday, the same as free money Monday. We're right in the free money zone buying and selling the support and resistance between 1675 and 1689 (approximately). For those interested in risk management, 1671.70 is a good spot today for stop loss.

Free money zone buy at 1675 to 1689.


Edited by TechMan, 08 October 2013 - 09:18 AM.


#4 dasein

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Posted 08 October 2013 - 09:13 AM

Thanks Mark - Isee index only was very bearish yesterday all day, too.... normally and recently, one should expect a bounce at the trend line, but for other reasons (divergences breadth environment patterns) it feels different this time.
best,
klh

#5 selecto

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Posted 08 October 2013 - 09:25 AM

On the cash, beware the band expansion and the nearby (downward) mo.

#6 ogm

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Posted 08 October 2013 - 09:30 AM

The bubbliest stocks and sectors starting to lose steam finally too. LNKD, NFLX, FB, Biotechs, etc. Nasdaq definitely starting to fold. IBM hitting new 52 week low. Ducks are lining up. This is going to be more fun then shooting a barrel full of monkeys ;)

Edited by ogm, 08 October 2013 - 09:35 AM.


#7 fluid

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Posted 08 October 2013 - 09:33 AM

I'm very Bearish. This crew doesn't often get wrong when they're really leaning.

We also have obvious support just below. If it goes, it gets ugly.

Yes, I'm short for the day trading service.

Comments to come.


The vix looks like its about to break it out.

#8 OEXCHAOS

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Posted 08 October 2013 - 09:47 AM

BTW, for better or worse, I'm not all that Beared-up for the IT. We have a set up here, however, and the potential pay off is enough to play for. And, as stated, there's risk all around, thanks to news events. M

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#9 mss

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Posted 08 October 2013 - 09:47 AM

:o

This thread is really interesting. :)

I thought this one was too: LINK TO THREAD B)

mss
WOMEN & CATS WILL DO AS THEY PLEASE, AND MEN & DOGS SHOULD GET USED TO THE IDEA.
A DOG ALWAYS OFFERS UNCONDITIONAL LOVE. CATS HAVE TO THINK ABOUT IT!!

#10 OEXCHAOS

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Posted 08 October 2013 - 09:54 AM

It's always interesting when we all get to a similar place using different methods.

Mark S Young
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