As usual, check tonight's extensive post at Trade Guild.net, it will give you the confidence you will need. If you did what I mentioned last night and accumulated positions in the Ultra longs and 3X Bull ETFs you did the right thing today, so long as you followed risk management plans. Tomorrow, if we break below $105, I'd add maybe 25% when prices move back above $105. If we don't make it that low, then you'll want to do one of two things, (first you may want to take any profits off the table in shorts or some any way for the time), you will either want to add a little on lower prices, and then add the rest as we break above the trend channel reversal point at $110 on the SPY as of now. Like I said in the TG post, if the market moves lower, so will the trend channel and our level at which we have a reversal (which is at $110 now). This is why it is very beneficial to you to have these indicators for yourself on a realtime basis. I have written them for both TeleChart and Stockfinder, the links to each are at the top of this site on tabs. If you sign up, tell them Trade Guild sent you, email me and Ill set you up with the code.
So the idea is we want to have accumulated at lower prices (that should have happened today) and that represent half of our intended position and then we want to add the rest upon confirmation of the reversal. To draw in buyers, Wall Street will have to make this rally look really, REALLY convincing, that means it will rocket up and traders will have this sinking feeling that they were left behind. So that is why I suggested being in early. I suggests adding at the reversal to mitigate risk. We add as they trade moves in our favor. If for some reason all of this analysis is wrong and you'll know that if price moves significantly below $105 then you'll ant to be out quickly. I saw this because the stop/limit orders are sure to be piled up below $105, it will only take a move to $104.75 to hit 90% of them and they don't want to take this market that far down if they need to turn around and take it back up, they just need to hit the stops under or at $1o5.
By the charts look and feel, I think they don't need the $105 shake out, I think they are close to being ready now and Friday makes a good day to put in a strong rally.
If you have core shorts, it's still ok to hold them, although we did take some off the table in larger positions, we will add them back later. Either way you should be in good shape if you do have the core shorts, a failed rally and you are hedged with the shorts. A good rally and you will gain on the longs and only have temporary drawdown on the shorts as the longs have hedged them and the outlook for the long term is down to new lows so that just makes the long trade an extra bit of profit and another chance to load up the shorts at better pricing.
Tomorrow is going to be a key day, you will want to watch the market as this rally could come Friday and it could blow through $110 in minutes.
Look for updates-subscribe to email updates at Trade-Guild or just check. I'll probably post something pre-market, but the trades are the same ones I've had listed, the ETF's that are 2-3x leveraged and you only need 2-3. I'd choose a good 3X financial and something leveraged on the Q's or Russell, so you have financial and broad market exposure. There's no need for a bunch of positions on this trade.
As always, email me with any questions and happy profit hunting. DON'T FORGET YOUR RISK MANAGEMENT PLAN!!!!!!
5 years ago
