Thursday, November 13, 2008

Down to 805

I don't like the way the market has traded since yesterday's close. We have run up and down between 845 and 865 several times and in my experience the market rarely gives you more than one chance to buy near the low. Today there have been several. 

So I think we shall see a drop below the overnight low at 825 in the futures which was made on October 27.  But I don't think the S&P's will spend more than a couple of hours trading below 825 before a big rally starts. My best guess is that this shakeout low will occur in the 800-10 range.

In the meantime, any rally to 885 would be very bullish and make me abandon my "down to 805" scenario.

6 comments:

Anonymous said...

Hi Carl,

Great minds think alike. But, of course, that leaves the two of us out.

Anyhow, to let you know I dumped my three experimental longs at 849.00 and will see how it performs. Clearly, my confirmed near term sell signal of two days ago has been working like a charm.

Thanks.

Kindest regards,

PM

smcneill said...

Why do you think a print at 805 will spark a rally?

Win said...

Carl,
It appears to me -- from the trades you have posted, and I apologize in advance if I am wrong -- that you rarely short, even if your analysis tells you that we are headed lower. What this suggests to me is that you have an inherent bias -- to go long, and that affects your trading. If I am correct, then as a person predisposed to going long, you would constantly look for bottoms to buy, not tops to sell. This bias would be perfect in a bull market, but it would seriously affect your trading in a bear market, where the optimal strategy is *not* to look for bottoms, but for tops.

It thus appears to me that if you were to apply your excellent box theory in reverse in bear markets -- look for tops to short -- you would do much better.

Anonymous said...

Hi Carl,

A close today below 821.00 would give me another confirmed sell signal. The previous sell signal issued earlier this week with a close below 895.10 has worked very well.

Thanks.

Kindest regards,

PM

Anonymous said...

Carl,

Looking at your 63% gains is hard to believe you made that... I have not seen anyone call this market correct... I know in the end it's profit n loss, but if you would have just switched hats and short every rally your 63% gain would have prolly doubled!

I would think if i made63% gain, i would be calling the market a little better... I don't get why u are so bullish on the market, when the sky is falling and we are going into a GREATER DEPRESSION!

From what I read, we are not going into a recession... we will be going into one of the GREATEST DEPRESSIONS of all time!

ex

Anonymous said...

Hi Carl,

I reinstated my three longs at 943.00, this entry is a few minutes late, but there's lots to do in a fast market.

Thanks.

Kindest regards,

PM