GOOG Charts

Here are the charts for GOOG. This is an example of what I want to show you, maybe not the best, but it makes the point.

I think it's a personal decision as to how much risk you can tolerate, how much patience you have (which is a big one because not a lot of traders can sit through a couple of weeks without putting on a trade)  and how much draw down you can tolerate. There are hedging strategies that I think are probably a good strategy to explore, like short term calls maybe out to November or so because it does seem like we will still get this bounce, but when you put the bounce, even a strong one, in perspective, it's very hard for me to justify not having a longer term core short position in place. When I say core short, I generally mean an equity short with no leverage that is meant as a longer term trending trade.

Their are other considerations such as whether you have the time to watch over some of the shorter term trades and a big one for me is how many trades you have open at once. I'm not a believer in over-diversification because there's very little rotation in the market, everything is pretty well correlated, either risk on or off. So, I'd rather have 6-10 decent positions than 20, I just don't see the need for it, I think you can diversify enough with 6-10 considering how correlated the market is.

Perhaps after you see the charts, it will make more sense, but I really think this is the time to really decide how you want to approach the market strategically that fits your personality, time, etc.

 GOOG 1 min intraday and this is largely where the trade is. I think price can come down a bit and offer a better entry, but at some point the micro-managing I think risks losing sight of what's really important, unless you have that kind of time and are suited to that kind of trading.

Put another way, I'd say it's time to make decisions about making a transition from using a scalpel to using a more blunt instrument, to decide how much or how many shorter term trades you want to be involved with (this is just a function of where the market is, these are the trades that have been working) and how much you might want to transition to a broader view, but understanding with that broader view comes some draw down which is insignificant in the broader context, but can still be annoying day to day, those are all personal decisions.

 2 min GOOG is building out so it's starting to look like a good candidate for a MCP-type trade, leveraged and short term with short duration market risk as a long position.


 The 3 min chart is building out. I'm of the mind right now that I'd rather see the 5 min chart show clear positives before considering a call position in GOOG.

The 5 min with a relative positive, very weak at this point, but it could build out as the intraday 1-3 min charts have. I'd have to see if GOOG's price at that point still offered a reasonable entry.

This is the 60 min chart, try to imagine how much upside we might get from a 3 or 5 min positive divergence. I doubt it would be a new high, I think it would be more like the recent swings and with options that can be worthwhile for double digit gains, but that 3C chart is not going to improve, if anything it will get worse.

This daily chart is extreme, but this is how bad things are. This is why I am really bringing the subject up. If I were a longer term trader with patience and day to day gyrations didn't bother me, I used wider stops and took on fewer shares and didn't want to be bothered with watching the stock every day, I'd pretty much be trading GOOG from the short side, I'd be entering full positions and just being patient with them.

For a lot of us, that's a lot easier said than done, especially if you watch the market all day as many of us do and you see these short term opportunities to make a quick 30 or 40% in a day or so.