Thursday, November 20, 2008


Bulls got killed again. This is probably the 100th+ time this year. Don't say that I didn't warn you either. If you're still "hoping", then go back to your corner and keep praying. We broke our consolidation low yesterday, and today confirmed a clean break with a major spike in the last half hour and cut through the 2002 lows. That rally we had? That was a really large bear flag.

My gains for today put me at a +69% return for this month so far (the market is down -25% this month). My students have also pillaged the market with me and took whatever they felt like taking. If you can't trade this market and/or don't know how to, then get out. If you are slow to react and think too much about a trade, then get out. If you're still trading on fundamentals, then you have the right to lose every penny. And give it to me. If you diagnosed yourself with multiple personality disorder, seek professional help. This environment is not for you.

Today's orders for my subscribers: 1) 9:14AM - hold 25% Short/75% Cash from overnight positions. 2) 10:05AM - Add additional 25% Short. 3) 10:43AM - Hedge all short positions. 4) 11:19AM - Remove all hedges. 5) 12:23PM - 100% Cash. 6) 12:50PM - Add 25% Long. 7) 1:12PM - Hedge all long positions. 8) 2:08PM - 100% Short. 9) 3:27PM - Risk-averse traders cover before the close. That's all for today. You can't blame the market for anything, because your successes and failures are entirely the result of your trading decisions. No one said making money was easy, but there is always a way to make money.

Looking forward into tomorrow, if the S&P 500 does not close above 800, then that will mark a continuation in the leg. I don't really see any positive catalysts that can make the market rally 50 points. We may get a nice bounce to the upside following the last hour crash today. We have not hit a capitulation point, so the rally we do get will be a secondary reaction rally. The market is and will continue to get seriously, downright, and utterly crazy, so remember: if you can't handle it, don't trade.

SPX 1-day

SPX 3-day

SPX 10-day

SPX 6-month

SPX 10-year

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!


MAX2205 said...

you are very good. Have some humility. Just friendly advise. Don't be like the fly. He is full of shit.

Thanks again for your work!!

John C. Lee said...

Not being an ass, but I'm speaking some hard truth to people who 1) might not get it yet, 2) believe all the crap on CNBC 3) don't bother educating themselves. This is a very expensive lesson to some people and they better wake up.

Fly is cool.

Complacent Panda said...

Fly lost a ton of money on C and some other bets. I enjoy reading the guy, but I wouldn't call him a brilliant technician. He's made maybe 60% this year; john made that amount last month.

John C. Lee said...

What's going on, panda?

Fly is not a technician at all. He doesn't really like it. So the comparison would be apples to oranges (fundamentals to technicals).

The only reason why TA works so well is because the trading timeframe drastically reduced to a very, very short one. The shorter the timeframe, the more effective TA is.

Anonymous said...

What inputs do you use for MACD, and %K/%D, and do you change it based on the industry/company/short/long(even though you don't go long)?

John C. Lee said...

hello anonymous,

I use the normal, default inputs

MACD -12,26,9

Get some ID.

Bob said...

John have you looked at

I just ran across it by reco.

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