WE DON'T CHASE, if you have been reading the posts of the last week, you should be substantially short in any number of excellent ETFs that are making crazy money. The fact is, I wrote two days ago on T.G to expect a waterfall sell-off this week, today we got it. Do we get follow through Friday? I don't know, but if you want to add or establish new shorts, don't chase this market. Nothing goes straight up or down and tops are extremely volatile so you will get your chance to add or establish at higher prices. Until those higher prices come, there are not really any setups worth mentioning that are high probability at this point and going long is insane right now. So if you got on the boat, congratulations, if you didn't-this is just the top 10-15%-there's plenty of downside and you'll have a chance to jump in at better prices. If you do establish any shorts, make sure they are only a small portion of your intended position, leave room to add on a bounce-it will come at some point.
It's hard to say what will happen next-some think it's capitulation, but just like a top, a bottom is a process and I think that process is just starting. I'd urge patience-Take profits on gifts-moves of 30-40%, maybe leave some on the table though for additional profits.
Lets see what happens tomorrow and over the weekend we'll establish our plan.
I hope you found your $50 worthwhile this month :)
5 years ago
