Limbo?

The 3C charts have taken a turn for the worse, but that does not preclude the possibility of a bear flag which means later in the week we may see upside, but tomorrow will say a lot. Until then, I'm hesitant to post any new trades as this market could swing like a pendulum and move down quickly, despite my original feeling that we would see a bear flag consolidation.

The list of April/May  has a number of shorts, the same shorts I'd post tonight if I felt we would see downside or a continuation of the downtrend.  So look at the 26 ideas, specifically the shorts and make sure you are not in any two trades that are closely correlated. At this point we will give up a few points to put the probabilities on our side, which right now, we have none other then to say tomorrow appears to be a down day at this point.

Should the SPY break the $114.80 level you may want to add 1/4 of your intended short position choosing from the trades of May 2nd on the above mentioned/linked lost. Forget the stops for now, I'll update them if the scenario plays out. A break of $113.65 and you will want to be at least 50% short so you will add. Should we close higher then today's close of $115.81, you'll want to close 1/2 of the positions you took at this point. Should the market break $112.50, you will want to be all in, but always consider your risk management rules. Even at that point you don't want to swing for the fences, we'll swing for the fences below $111.25 on the SPY.

As for the ZSL trade, as I mentioned, I believe it may be a false move. In the previous post I told you how to handle it.

At this point, 3C is not showing anything more then the probability of downside Wednesday, it is not showing any particular probabilities beyond a close lower which could be only marginal.

As the market's movement account for more than 60% of your stocks probable move, you can see we don't have a strong position yet unless the above support levels break. Until we have a strong edge, it is irresponsible of me to post trades that I can not definitively say "You have an edge".

Part of your ability to make money in the market, is know when to hold, fold or walk away-as the song goes. Your only real edge over smart money is your ability to sit and lie in wait, whereas they are forced to trade everyday. Right now, we are going to use that edge until the picture becomes more clear.

Watch those support levels and add judiciously, in similar fashion to the example I gave above.

Tomorrow if we see continued deterioration in 3C, the bear flag scenario becomes less likely and I will list additional short trades. Right now the list I mentioned has some of the better trades that I would be pushing for now.

Be patient and don't hesitate to email me with any specific questions. My contact info is on the site under "Email Me". Don't be misled, we have a huge opportunity and taking advantage of that does not mean that you must always be doing something. Sometimes the best thing to do and the hardest thing to do is nothing at all.