Incogniteaux
Short

Bear Pennant near completion

AMEX:SPY   SPDR S&P 500 ETF TRUST
RSI and volume both confirming a move down in the next week or two. How far is anyone's guess.

Comments

Looking at your track history of calling shorts, seems best to do just the the opposite.
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@azdevil, lol, not fair, brrr... plus if he’s wrong 90% of the time this one may actually be right
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azdevil FishyTrades
@FishyTrades, HaHa your right, but its hot here in AZ, 107 today. He is exactly why I think also believe 90% of the (Michael Burrys) on here don't actually have any skin in the game.
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@azdevil, I have skin in the game, but it's just hedges on an otherwise very conservative strategy. I have some skin in the short game, but not much. Like, a hangnail. I trade trends, not patterns. I like this platform because it allows you to see through paper trades what patterns are reliable however much of the time. And, yeah, they aren't terribly reliable. Simple stuff like these pennants I've been looking at aren't patterns I would recommend anyone trade on by themselves. From market fundamentals we get way better information about the trends and what to expect than from patterns which are often very subjective. It's fun learning the logic behind them, though. They aren't totally useless.
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azdevil Incogniteaux
@Incogniteaux, Good I have hedges too, but all going to hell, very high chance this doesn't break below 3K for a long time, but no one else on here would think that
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@azdevil, I am 100% caught up in the fantasy of crashing out if consumer spending doesn't ramp up immediately. I have trouble seeing it going any other way, but I'm not betting the farm on it.
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azdevil Incogniteaux
@Incogniteaux, You used the perfect term Fantasy, how is this gonna happen when 90% of the people on UE are making double when they where working, there is tons of pent up demand from being in your house watching Netflix all day. I just told my buddy whats gonna happen and it started. Gonna be down 1% tomorrow, gap down on Monday to 200 MA at like 299, shake out the weak hands (give assurance to the bears) and go to 3136 by June Option expiry. Doing the same thing as to the start of May.
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@azdevil, I find that the markets manage to defy all rationality, so I try to be my own devil's advocate as much as possible. I agree with your thinking, but the question I always ask when I get to a reasonable conclusion is whether there's an equally reasonable conclusion built on facts that suggest something different. Always remember the black swan, right?

How is this gonna happen when 90% of people on UE are making double? Well, it probably won't. But if you were wrong, what is most likely the reason why? So, some people are making more, but no significant number of them are making double. Even so, it isn't going to last. All the UI recipients know that. UI is limited by time. The administration is not famous for forward-looking solutions, so people are using that money very sparingly. Everyone knows their UI might run out before the crisis ends and it's not like there's a plan for what happens if it does for millions of people at virtually the same time.

If you look at the gains of the market they've happened on diminishing volume. This is never a sign of a reliable gain. It's easily explainable in terms of the FED's recent bailout. That's what I think we're seeing in the market's recent upward price action, not increased investor confidence.

So, while your reasoning is actually pretty strong on some things, the question as to what else might be happening besides that might lead us to a reasonable doubt in the longevity potential of this rally. So about the Fed- what's going on there?

The Fed has bought a bunch of bonds with the expectation that everything will start poppin and chooglin again, that the debts will be paid back, and that we'll all be good to go once we open up and money flows. The problem is this: that was their last bullet. If that doesn't work, if we get a second hit of this virus (most are saying there's a strong possibility) then those debts aren't going to be repaid and we're going to see hyper-inflation. The purchasing power of the dollar as they crank out all that money will crash if that debt stagnates.

You might not agree with that scenario, but it's just an example of a different reasonable way of seeing how this might all play out that is smart to bear in mind. There are many bearish scenarios that can happen from here. Right now I'm seeing many indications that that's possible between the following factors: volume being low, insane amounts of dollars being printed, unemployment going into the stratosphere, supply chains beginning to fail, entire inventories being stopped from weighing anchor at ports, oil demand being low, copper being in the drink as well, gold climbing to ATHs, real estate tumbling like a mfer because of airbnb properties flooding the RE markets w inventory, just to name a few. They may decide to make an emergency move toward negative interest, but that's not going to help. I think people are going to turn to anything but stocks in that case because it's going to look desperate.
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azdevil Incogniteaux
@Incogniteaux, I just googled low volume as indicator of prices dropping , I found this article on Marketwatch dated Jan 20, 2019, title Opinion: Here’s what low NYSE trading volume is telling us about the stock market’s direction. Here is a sentence from it "You can relax. I was unable to detect any relationship in the historical data between trends in price and volume, at least since 1972 (which is how far back I was able to obtain data)." The market proceeded to gain 21% until Feb 22, 2020. So I hear this alot, but maybe for the last +35% you could have been saying this all along.
I not disputing all these concerns they are valid, but the market is not rationale , we all know that. but in your first response you cited trading trends, well the trend has not broken, until it does nobody can honestly time that and short it without losing money in the process.
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azdevil Incogniteaux
@Incogniteaux, The only thing a technical trader - investor should be doing is trading the chart in front of them. The rear view mirror means nothing, but it seems that rear view mirror fear is whats driving people skepticism the most.
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