Tuesday, March 3, 2009

MARKET COMMENTARY (3-2-09)

Looks like we will get a small bounce this morning. I am waiting for a nice sized bounce, preferably an inside day, to add short positions. There is no way I will be loading up down here. Likewise, people who are going long should be aware that we have not reached a capitulation point. If the day does end positive after a gap up (no more than +2%), then the chances of going 'largely short' are high.

Take a look at the 5-month chart of the SPX. Volume is picking up and it is supporting the selling. Although this "sell-off" has been very slow, if you know what I mean, there is enough volume to back it up. At some point, we will hit capitulation and form a short-term bottom. When the reversal day does come, it will be blatantly obvious. Either you wait for a bounce, or you go long on the reversal day. I plan to do both.

From a swing trading perspective, I have no other charts to offer, because we are in 'uncharted' territory with no immediate support/resistance levels.


On another note, America doesn't need to wait for a ratings agency for a downgrade. We've been downgrading, or more accurately, degrading ourselves for years. Just take a look around you, around society, on the streets. etc. America is downgraded in education on every level. 50% of high school students do not graduate. Asia is killing us with their armies of engineers, scientists and doctors. America is downgraded physically. Take a look at all the morbidly obese people walking the street. Many diseases are preventable by just keeping a healthy diet, not smoking, and not drinking (excessively). Yet, most people just don't care. America has also downgraded itself psychologically, morally, spiritually...everything. Every facet of life. We're in a much larger crisis than a financial one.

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

14 comments:

Med Fins said...

I am not a chartist, I am indeed a rookie trader.

But, when all the bloggers use the word "capitulation", I think you are wrong 90%. Capitulation is not the bottom, I personally think we have seen capitulation in October. Capitulation by no means mean a bottom.

We may be in the despair phase, that could be a prolonged one.
http://www.irvinehousingblog.com/wp-content/uploads/2007/06/bubble-psychology.jpg

John C. Lee said...

That's the wrong capitulation. I'm talking about a massive sell-off and a short-term sustained bounce. There are many capitulations along the way that are need to flush rookie traders out of the system.

Med Fins said...

You have a wrong opinion on
1, rookie traders
2, capitulation

If you notice any recession, the old clowns retire because they make too many mistakes. Rookies/ freshies emerge unscathed because they don't have too much on the table and dont make complex trade.

That capitulation is wrong? Are you telling me that the textbook capitulation is wrong? If you can't find a better word [than capitulation], then you should STFU. But dont use wrong words.

BTW, You need to post your own blog rather copy from others http://ibankcoin.com/chart_addict/?p=473

Cliffynator said...

HAHAHA! WOW, Med Fins! Just...wow!

Med Fins said...

see, when you are caught pliagirizing stuff from other blogs, you are losing your head and cursing.

Moneymonkey said...

MED FINS What a moron! Why don't you go do some research before accusing others?

All started back in NOV

http://weeklyta.blogspot.com/2008/11/king-of-peanut-gallery.html

Man John forget these useless idiots, they are wasting your time.

TMI

Moneymonkey said...

And just in case you are not smart enough to figure it out. WEEKLYTA = CHART ADDICT. =) Now just be good and ask for help I mean why the hell you are here reading this blog anyways.

Moneymonkey said...

Hey MY friend couldn't leave a comment but here he ask me to post this

"Med WTF ur either a a-whole or you been in one. Either way ur a ass or a dick i'll let u decide which. JC is chart addict..lmao. Anyway J keep up the good work thx to you i've been banking big Buck$$$$$$$ extra emphasis on the uck'$$$$$. "

PEACE OUT

RPS said...

Frankly, I'd rather have a page from John Lee than a book from Geithner or Bernanke. John has no agenda...making his comments of value, while Bernanke seems to be trying to rehab his reputation.

Cliffynator said...

Hey Med Fins, where's your blog? I'd like to know what the rookies are trading these days before they run out of capital.
I think John has done an exceptional job of explaining TA, which is why I choose to follow his blog. You don't like it? Change the channel! I bet you don't get out of trades you don't like too quick, either!
It's one thing to disagree with the author. But, wow, man! Do some friggin research before you spout-off!

John said...

Med fins you need to get your facts straight before you go around accusing people, looks like you need your attitude checked as well because bloggers who go around insulting other traders are usually losing their ass in the market. Anyways John C. ignore these retards your blogs awesome, it helps me sooo much and good luck in your trading and to all fellow traders here.

Salsaman said...

Now how does he know that Chart Addict isn't stealing from this site...huh.. huh??? ;)

Other than that funny, it's a sad thing you just posted about the US. True, but sad.

Ed said...

I disagree on the uncharted territory part. 1997 support and resistance levels are hitting dead on.

John C. Lee said...

1997 is not an immediate support level. I wouldn't even bank on it in the long-run.

The Chart Addict likes to steal stuff from here on Monday, Wednesday, and Friday. I like to steal stuff from Chart Addict on Tuesday and Thursday. We steal each others stuff simultaneously on the weekends. We just made the deal.