My Dax bear market short trade is still running since earlier this year and today i will take some profits now. We have (almost) reached the target of that H&S already and i am not going to risk 2200 points to get that last 100 points for the 10.500 target. The 10.500 H&S target is the most conservative i can see, so i have decided to take 50% profit at this point of my long term trade.
Now my main reason for me doing this, is because it is December. The past 20 years we have never seen a big drop in this month, except for 2015. I actually even though we might not even drop at all the past weeks, but the market is clearly very weak. Another reason for taking partial profit here, is because of that potential big support zone, the green area on the left chart. Third reason, as it happens in all the markets, i think there is a very realistic chance for a bear trap around the current levels. The market is getting slowly more bearish now, so we tend to see retail money short these lows. What do the pro's do, they push the markets up, use their stop loss levels as fuel to push the market up again.
Now i can always short it again if i start to see we will not move up, but for now i think there is a reasonable chance for a move towards the 11.500/12.00 again to test former support levels. This would be an ideal spot for me to get back in with that 50% again. My assumption is that we might be able to short it again somewhere in late Jan of 2019. Because i can not be sure of all these assumptions, i am only closing 50% and not 100% of the position. So i don't miss out on my long term trade in case i am wrong for the short term.
Previous analysis:
Now my main reason for me doing this, is because it is December. The past 20 years we have never seen a big drop in this month, except for 2015. I actually even though we might not even drop at all the past weeks, but the market is clearly very weak. Another reason for taking partial profit here, is because of that potential big support zone, the green area on the left chart. Third reason, as it happens in all the markets, i think there is a very realistic chance for a bear trap around the current levels. The market is getting slowly more bearish now, so we tend to see retail money short these lows. What do the pro's do, they push the markets up, use their stop loss levels as fuel to push the market up again.
Now i can always short it again if i start to see we will not move up, but for now i think there is a reasonable chance for a move towards the 11.500/12.00 again to test former support levels. This would be an ideal spot for me to get back in with that 50% again. My assumption is that we might be able to short it again somewhere in late Jan of 2019. Because i can not be sure of all these assumptions, i am only closing 50% and not 100% of the position. So i don't miss out on my long term trade in case i am wrong for the short term.
Previous analysis:
Comment:
S&P analysis:
Comment:
And i saved myself some money again by NOT getting caught up in the emotions of the market. Now there is still a long way to go, but if they can keep this up, we could see an inverse H&S in the making here. That would confirm the bear trap move.
Comment:
Now if it stays above the 10800ish, that inverse H&S will become very likely.
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