9.2.20 We had a high of 3588.11 today we closed at 3585.14 to form a double top (yet to be confirmed).
If this isn't a double top, not only will I lose a lot come Monday, but it would be an extraordinary turn of events on the market. I hope I'm wrong for the sake of a majority of investors, but there are so many indicators that scream "TOP".
Lower Volume as the market climbed this week.
Stocks trading above their 50 day is at 84% which is within 1% of 7 of the last 14 market tops.
Stoch RSI is a week into overbought territory.
Divergence up to 64.
MACD higher than it was in February.
On the weekly the MACD and Stoch RSI are almost identical to Feb. 18th.
A Hangman candle on the weekly chart.
The icing on the cake is the psychology. AAII sentiment spiked to a 15 year high! Ultimate contrarian indicator.
Even the put/call ratio is at a peak position.
I don't share much on here, but I don't usually have a lot to say. If you took the time to read this and you got something/anything out of it, shoot me a thumbs up and I'll continue to share as things come up. Not a lot of thumbs and I'll simply keep to myself.
I went 20% short at close today so I'd tell you to invest at your own risk, but in this case it's at my own risk LOL
I absolutely agree with you, I went 30% on short with PUTS. It screams what's going on. but still I don't feel safe. market doesn't make sense at all. it's corrupted and manipulated by dump money, it's not smart money anymore, it's just dump money. thanks for sharing your idea.
SLOPolarBear
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Logic is what gets you into trouble. Logically, you're correct. Now consider insiders who can see positions being placed on both sides of the market and deep pockets ready to manipulate the market to their advantage. It's traders going short on Fridays when everything screams 'sell, sell, sell' that causes massive melt-ups on the following Monday, as shorts run to cover. The optimal time to short is when the market is in full-correction. No need to lock in the top or bottom, just ride the wave and enjoy the profits from 65-75% of the move. As a fellow short'ee, I'm complicit in this kind of behavior so I wish you the best of luck. I've been in cash all week.
z3m25
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@SLOPolarBear, appreciate the insight, only time will tell
DaddySawbucks
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@SLOPolarBear, Absolutely right on. After struggling for years to call tops and bottoms, discovered the simple method of shorting when it's bearish, buying when it's bullish. If futures indicate a gap up of 200 DJI or 20 SPX pips, and it actually opens at that price, there might be a fade back to close gap or it might not; but the EOD price will be about twice the size of gap, usually. OFC when the gap was 1500 DJI pips there was nowhere to go but back down, LOL. Friday was typical gap up, bullish day: faded gap a little, some early indecision, then bullish as Hell all day and an EOD frantic short-covering move, to close at twice the gap opening price. On Bearish days, if DJI gaps down 400 pips, you might get a wee bounce for half the gap then it will suddenly roll over and dive down 800. Saw this three days in last week of October. Never had to guess and worry overnight what morning will bring; just go with what you find at the open! BTW a cheap but often very profitable trade is to buy expiring call options at 2:45 on Friday PM, about $1 OTM above current price on SPY, QQQ or DIA: when the short covering burst comes, as it often does, the .40c calls can go to $4...! Don't bet the farm on this play! Expect to lose the whole premium occasionally; 10 .40c calls is $400, it's a cheap bet IMO. You will want to close this position before the market, as the burst usually fades back down in last 10-15 minutes, and you do not want to take exercise at expiration.
SLOPolarBear
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@DaddySawbucks, More valuable info in this one comment then most investing books! Thanks DaddySawbucks!
I was short when the Vaccine was announced....THAT HURT.....hoping reality finally comes home - cause this is market is insane. Wishing all a suuccessful week - and may lock-downs awake us.
ruimnetob
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@SeattleGuy just like me. What did you do, if anything