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Something This Way Wicked Comes—–A Deep Dive Into The Market Charts


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#1 gm_general

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Posted 07 February 2016 - 03:51 PM

Opinions?

 

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#2 viccarter

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Posted 07 February 2016 - 05:20 PM

of course we are gonna retrace the 2013 breakout levels.

 

JUST NOT RIGHT THIS SECOND. 



#3 csw2002

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Posted 07 February 2016 - 06:08 PM

 

of course we are gonna retrace the 2013 breakout levels.

 

JUST NOT RIGHT THIS SECOND. 

 

 

I know you have been following trin keenly. The current down draft is still unable to produce anything substantial in trin that signify fear (trin = 1 on Friday at close). Late Sept 2015 had a similar period of down drafts without too many high trin days. Unless we are looking for a replay of late Sept 2015, I think we ought to go lower to test or take out the January low. Another issue in comparing against late Sept 2015 was that OEX traders were turning very bullish with a string of day of OEX PCR closing below 0.8 back then. If anything, we had OEX traders bearish rather than bullish recently with Thursday cash close PCR ratio at 10.8 - which, along with EOD OEX PCR (and IMHO, those sets of numbers are computed differently by CBOE) 2.8, made a good tell for Friday's decline. Do you still hold the opinion that trin is giving you a bottom reading as of previous week?


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#4 viccarter

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Posted 07 February 2016 - 08:46 PM

I am not trying to get too cute with what I acknowlege is probably a major top.  However, I do trade on a shorter setup, and while I have not been actively trying to get long the indices so far, I have been agressively long oil good independent oil and gas stocks on dips like COG, MTDR, RRC individually, and especially FCG the etf.  Have also been long gold miners for months on buy dips sell rips.  Finally its looking like more of a trend move with the miners, although short term overbought will test that theory.

 

As far as playing longs, that's how I am playing it, but I do think that we will ultimately bottom this week and go for a counter trend rally up on the indices.  I have no longs in the indices at this moment, so let me temper my comments with saying I don't have any skin in the game as far as the indices go right now.



#5 csw2002

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Posted 07 February 2016 - 10:02 PM

Thanks for your response. Based on my read, we have a very crowded short on among SH, NAAIM and Rydex bears. In 2008, other than Oct 2008, they all marked good intermediate term bottoms. Of course, if I had OEX traders leaning long or more fear in the January bottom, I'd be looking to get aggressively long. My read is the same that we should bottom this week - either with a spike low or a consolidation bottom - but what do I know.


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#6 NAV

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Posted 08 February 2016 - 04:07 AM

Thanks for your response. Based on my read, we have a very crowded short on among SH, NAAIM and Rydex bears. In 2008, other than Oct 2008, they all marked good intermediate term bottoms. Of course, if I had OEX traders leaning long or more fear in the January bottom, I'd be looking to get aggressively long. My read is the same that we should bottom this week - either with a spike low or a consolidation bottom - but what do I know.

 

 

If you look at too many things, you will never get long or short. Rarely do all indicators align. If it did, it would be the Holy Grail !. I chuckle when people use 5-10 different indicators to time the market.

 

Too few degrees of freedom = More whipsaws

Too many degrees of freedom = No trades or Johnny-come-lately trades 

 

Like everything in life it's an optimal balance. 1 or 2 indicators are more than sufficient to time the market. It's not about perfection. It's about dipping the toe and taking the risk, playing with optimally sized  STOPs  to manage risk. Most trades can be managed with 2 or 2.5 ATR. You gotta take the plunge and be in the market to capture the market moves. Everything else is noise, analysis-paralysis, pretty charting, personal opinions, speculations, theories, perceptions, feelings or emotions.


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#7 csw2002

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Posted 08 February 2016 - 06:18 AM

 

Thanks for your response. Based on my read, we have a very crowded short on among SH, NAAIM and Rydex bears. In 2008, other than Oct 2008, they all marked good intermediate term bottoms. Of course, if I had OEX traders leaning long or more fear in the January bottom, I'd be looking to get aggressively long. My read is the same that we should bottom this week - either with a spike low or a consolidation bottom - but what do I know.

 

 

If you look at too many things, you will never get long or short. Rarely do all indicators align. If it did, it would be the Holy Grail !. I chuckle when people use 5-10 different indicators to time the market.

 

Too few degrees of freedom = More whipsaws

Too many degrees of freedom = No trades or Johnny-come-lately trades 

 

Like everything in life it's an optimal balance. 1 or 2 indicators are more than sufficient to time the market. It's not about perfection. It's about dipping the toe and taking the risk, playing with optimally sized  STOPs  to manage risk. Most trades can be managed with 2 or 2.5 ATR. You gotta take the plunge and be in the market to capture the market moves. Everything else is noise, analysis-paralysis, pretty charting, personal opinions, speculations, theories, perceptions, feelings or emotions.

 

 

Thanks for your input - appreciated as always. I don't take many trades and only do so when I am reasonably confident of success. With dumb money short + smart money (OEX traders long), the success rate of this setup is 90% over the last 10 years. I don't see OEX traders getting bullish yet so I need to wait.


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