S+P 500 has created a potential "double top" reversal at 3225 with two monthly attempt failures now recorded in both June and in July.
Also notable,and shown here is the "ATR" Average True Range Indicator, which importantly showed a continued bearish divergence with price and "turned down"( Note the chart) on the last attempt to breach 3225, on a weekly close.
However, traders must be very careful about shorting this market in size. If you choose to go all in,, make sure you are "bid away" GTC from the market, so if price starts to fall substantially, your short would be activated on a "Buy Stop"
But do note. An overriding concern in being substantially short, is that there is now an unprecedented world health organization press to find a virus cure. if that should occur, I would suggest to you that the stock market could rocket to the heavens. Obviously one would not want to be short at that moment.
Nasdaq 100 technology stocks however have seen the first significant cracks in their armor this past week in an extremely overbought herd mentality trade.
Bottom Line. There is substantial risk,on either side of the market.
Traders should pay careful heed before they think of pulling the trigger, on an investment that they could substantially regret doing so.. later.
Hi
As for a virus cure if its discovered in the US it probably will not be announced until late October just before the US general election.
Those old enough can remember then US National Security Advisor Henry Kissinger announcing "Peace is at Hand" in regards to US involvement in the Vietnam War.
This announcement came about two weeks before the US General Election. Result - Richard Nixon wins re election as President in a massive 49 state landslide!
Dream on.
I''m old enough to remember it all.
This time a virus cure, whenever it comes will not be enough to save this "high risk"
individual who currently occupies the president's office of the United States.
God help us.
koa22
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I'm a novice trader been trying to mostly short the market over the past few months, I'm self destructing financially down huge. Be careful don't be stupid like me
DaddySawbucks
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@wschmidt22, Not stupid; inexperienced. Shorting is risky and expensive. You only do it when market internals, indicators, price action suggest rollover is possible or even likely. Just shorting a stock b/c "It's too high! Must come down!" Is pure fallacy; usually the Trend is Up, going Wrong Way hurts bad.
Just b/c a price is stupid high does not mean it cannot get higher. Thousands of fortunes lost and traders ruined shorting TSLA. It was overpriced at $400 and they shorted it up to $800; it was ridiculous at $900 and they said; "Short it now!" But it went to 1K; "Surely we can short it now!" They cried; but up to $1200 it went, then gapped up to $1400, $1500 and traded up to nearly $1800... armies of short sellers wiped out. In fact, the explosive rally is heightened by bears; when brokers call for more margin, forced liquidations at market price drive it even higher!
Follow the Unwind he offers excellent insight and timely warnings. Few weeks ago he warned against shorting and an explosive rally did occur. It's an exhaustion gap and parabolic peak; that was first top of this double top. You don't want to be a 'bull' or a 'bear'; you want to trade objectively on the signals and take what the markets give.
I lost quite a bundle in my early trading days just 'top-picking' and price-guessing. Trade on signals or sit out, you do not want a position every day!
Position sizing is the most important and most difficult to learn. If you have 1K, 10K or 100K, it doesn't matter how much you have on hand; you must trade with 5-10%, not more than 25% in one position. Sometimes I have both longs and shorts in same account; and all my positions are hedged.
Plunging rarely pays off; mostly it wipes you out... GL!
Thank you Mr. Sawbucks
Extremely empathetic, wise, and very learned reply.
Best advise you good have given.
Proud of you.
DaddySawbucks
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@The_Unwind, <Blush> LOL; Ty my friend; look what TRendFather pubbed, very fine insight (if it doesn't get higher, it will go lower!):
DaddySawbucks
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@The_Unwind, Another fine insight, the rising wedge is clear forming double top from the first selloff peak, breakdown soon IMO:
craigemm
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@wschmidt22,
hmmmn. Nope.
Shorting is NOT for the inexperienced there a certain specific set of STRICT conditions that need to be satisfied before leaping into that Shark infested Sea. You can only learn these via the experienced and canny Trader or via some expensive lessons & painful self-experience.
I applaud you for having the balls to give it a go though. I imagine a few years from now you will be quite competent.
"If you choose to go all in,, make sure you are "bid away" GTC from the market,
so if price starts to fall substantially, your short would be activated on a "Buy Stop"
AGREE. Its a great way of "setting traps" and I used heavily when Trading XAU Futures which, if u get it wrong by taking positions before "EVENTS" (Ie. NF Payrolls or Fed Minutes releases) can wipe your Margin out in seconds.
As for a virus cure if its discovered in the US it probably will not be announced until late October just before the US general election.
Those old enough can remember then US National Security Advisor Henry Kissinger announcing "Peace is at Hand" in regards to US involvement in the Vietnam War.
This announcement came about two weeks before the US General Election. Result - Richard Nixon wins re election as President in a massive 49 state landslide!