Monday, December 1, 2008


I am up an incredible +27.72% today - a nice way to start off the month, even though it is an unrealized gain. I mentioned that bear flag/ascending bearish wedge in my previous post. I went short various financials, including JPM, BAC, C, etc. and I still hold those shorts expecting a multi-day extravaganza, also known as a swing trade.

My orders to my students/subscribers included: 1) 8:54PM - 100% cash and alerted that "I am expecting to short this market silly very soon" (exact words) , 2) 10:25AM - short 50% (I went 100% a few minutes later), and 3) 3:19PM - I was 150% short into the close before the sell off. These positions will be held for several days, so a daily gain means very little to me. The goal for this week matters the most.

No, I did not expect a -9% down day. I was looking for a -3/-4% day. That late day selloff was absurd and it fueled round after round of massive panic selling. Meredith Whitney obvious added some fuel to the fire (thanks!). However, this slaughter is not over.

We may get a nice bounce or reaction rally, but that means nothing unless the SPX gains back today's lost -80 points (or close to it), and this must be done tomorrow for the market to even have a chance.

The volume was extremely low (indicating a lack of transactions...atypical of a accelerated sell off) and I expect additional selling for those that weren't able to -or- refused to sell today. Today should remind people that we remain in a trader's market. I stay short for the swing.

SPX 1-day

SPX 3-day

SPX 10-day

SPX 6-month

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

No comments: