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Don't Anticipate Your Sell Signals!


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#1 OEXCHAOS

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Posted 18 July 2018 - 09:23 AM

It's so easy to do. You see your oscillators up in Sell territory. You know the market is "overdone" to the upside. Maybe you've even fallen for some fundamental Bearish argument.

 

It just looks like it is going down.

 

Well, let me tell you, the market looks like it's ready to go down a lot more than it's actually ready to go down. Go pull up your favorite oscillator and really look at how much the market rallies after it gets overbought on that indicator.

 

Now, obviously, when a market is making new highs, this is more important to remember than when it's range-bound or in a correction, but even so, be mindful.

I've got a lot of stuff overbought. I'm not going to entertain even VST shorts until things really turn and stuff crosses downright negative. In fact, despite a FL/FS Sell today, I suspect that we rally (maybe it gets right tomorrow...maybe not...). I'm looking at the ES 280400 area for a long.

 

Mark


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#2 qqqqtrdr

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Posted 18 July 2018 - 09:49 AM

Mark -  I have a lot of stuff overbought as well, but given the Economy ( GDP, New Home Sales, New Car Sales ) are very strong, the market is not overvalued like it was 4 months ago in my opinion...   So my Long Term Charts ( Lagging ) are at a Buy, and Short Term Charts ( Leading ) are Bearish...   I usually use 10-day Put/Call Ratios to break the tie on which way to go but so far have not definite direction or correlation between ( OEX, Equity, CBOE ) to determine direction.



#3 diogenes227

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Posted 18 July 2018 - 10:14 AM

It's so easy to do. You see your oscillators up in Sell territory. You know the market is "overdone" to the upside. Maybe you've even fallen for some fundamental Bearish argument.

 

It just looks like it is going down.

 

Well, let me tell you, the market looks like it's ready to go down a lot more than it's actually ready to go down. Go pull up your favorite oscillator and really look at how much the market rallies after it gets overbought on that indicator.

 

Now, obviously, when a market is making new highs, this is more important to remember than when it's range-bound or in a correction, but even so, be mindful.

I've got a lot of stuff overbought. I'm not going to entertain even VST shorts until things really turn and stuff crosses downright negative. In fact, despite a FL/FS Sell today, I suspect that we rally (maybe it gets right tomorrow...maybe not...). I'm looking at the ES 280400 area for a long.

 

Mark

 

That quote I boldfaced above is a really nice line. Well said, and so often true.

 

I think I'll steal it. biggrin.png


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

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#4 OEXCHAOS

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Posted 18 July 2018 - 10:43 AM

Have at it!! :)


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#5 tsharp

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Posted 18 July 2018 - 11:35 AM

It's so easy to do. You see your oscillators up in Sell territory. You know the market is "overdone" to the upside. Maybe you've even fallen for some fundamental Bearish argument.

 

It just looks like it is going down.

 

Well, let me tell you, the market looks like it's ready to go down a lot more than it's actually ready to go down. Go pull up your favorite oscillator and really look at how much the market rallies after it gets overbought on that indicator.

 

Now, obviously, when a market is making new highs, this is more important to remember than when it's range-bound or in a correction, but even so, be mindful.

I've got a lot of stuff overbought. I'm not going to entertain even VST shorts until things really turn and stuff crosses downright negative. In fact, despite a FL/FS Sell today, I suspect that we rally (maybe it gets right tomorrow...maybe not...). I'm looking at the ES 280400 area for a long.

 

Mark

 

Exactly... I anticipate a sell signal up near the 2840 range, but until the indicator line crosses... no sell.

 

SP00_240_7.17.18-1.jpg



#6 LMF

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Posted 18 July 2018 - 11:47 AM

VIX below 200 day MA and there's a nice bearish island gap on the VXX daily chart......for a mid-term election year, there's no way to get a summer rally better looking than that.   VIX and VXX will let us know when it's time to start worrying about the next 2 day FOMC end of September. 



#7 LMF

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Posted 18 July 2018 - 11:50 AM

Definitely need strength here, setting new all time highs......QQQ and TQQQ.  Not much else.....



#8 tsharp

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Posted 18 July 2018 - 11:59 AM

VIX below 200 day MA and there's a nice bearish island gap on the VXX daily chart......for a mid-term election year, there's no way to get a summer rally better looking than that.   VIX and VXX will let us know when it's time to start worrying about the next 2 day FOMC end of September. 

 

Are ALL mid-term election cycles created equal?  Bull market vs bear market... early bull market vs late bull market... early bear market vs late bear market... good global economy vs slow global economy... strong US dollar vs weak US dollar... etc, etc, etc.



#9 LMF

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Posted 18 July 2018 - 12:18 PM

The mid term years are historically crap during the summer.....always no matter what.  Where the eventual buy points are typically below the 200 day MA by the fall.  But a good summer rally can occur before that.  I would say there's almost no way to get these markets below the 200 day MA without VXX going above it's 200 day MA.  Just a good reference point to make it simpler.



#10 tsharp

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Posted 18 July 2018 - 01:37 PM

The mid term years are historically crap during the summer.....always no matter what.  Where the eventual buy points are typically below the 200 day MA by the fall.  But a good summer rally can occur before that.  I would say there's almost no way to get these markets below the 200 day MA without VXX going above it's 200 day MA.  Just a good reference point to make it simpler.

 

To be sure, I do have an alt scenario that could play out something like you're describing... so we'll have to see how the current rise plays out over the next week or two.

 

SP00_D_7.18.18-_ALT.jpg

 

Link to chart: https://postimg.cc/image/hhc8qrcuh/