Monday, August 1, 2011

Relief rally coming Monday

Well what do you know - according to tonight's news it seems that the clowns down at the Reedling Brothers, Boehnum and Obamley circus have finally concluded their act.  And as I mentioned last week, the market would not turn around until that happened.  Now that it has, we're going higher.  At 1 AM all three market futures have gapped up by about 1.5%, an amazing number that I have never seen in my eight years of trading.

Even without this, the Dow, S&P, and ES daily charts were all looking quite bullish on a purely technical basis for Monday anyway.  So tonight is one of those no-brainer calls.  I am pulling my long hat firmly in place.  We're going higher tomorrow.

That said, the monthly Dow chart is looking very poor.  I'm planning to use any gains tomorrow to start scaling out of some long positions.  I'm currently about 1/3 in cash but I want to go more like 60 - 70% cash over the next few weeks.

6 comments:

  1. If today acts like Monday the 25th, only in reverse, it would be prudent to sell longs on the open, then load up again in the early afternoon. This counter trend rally should have legs for at least a few days.

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  2. Yeah, that idea sounded good - before the open. Then we got blindsided by the ISM numbers at 10 AM and it was back to tumbling down the side of the cliff again. This market is virtually untradeable (for me anyway). I'm still staying aside, at least until the VIX comes back in a bit. Crazy stuff.

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  3. Worked like a charm. Sold TNA @ 75.50, loaded up again at 70 even! :-D

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  4. Was that on a model signal or a discretionary trade?

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  5. No, definitely not my model. My first trade (sell a few minutes after the open) was mostly based on Rob Hanna's research that he provides in his nightly newsletter and also the post he made this morning prior to the market opening...over at quantifiableedges.blogspot.com/ Odds were heavily skewed that the day would close lower than where it opened.

    My decision to buy right around 1pm was a hunch based on the action of May 25th. Plus I wanted to get long again since my model is long. I refuse to short when my model is long.

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  6. Whoops, sorry. July 25, not May...

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