For me, as a full time trader, writing out my ideas allows me to verbalize my thoughts even if no one views them or cares...I do them for myself and myself only. It gives me history of my thinking process and helps me in the everyday learning process of being a full time trader. In fact, I'm always talking to myself to gain an understanding of my thought process so that I have a well thought out plan before I take on a trade.
So here goes it...my non-charting thought process as to why I don't think SPX will get to 4000 and why SPY will not get to $400. (From a charting perspective you can view my last two posts about wickless gaps and how I see those as continuation patterns, etc, etc.) Anyways, most people that know me personally know that I'm a full time swing trader so a lot of people have been asking me about the market and what do I think. At the hospital where my husband works people have been asking him "what is your wife saying about the market". So the general public is starting to worry about the overall stock market health and certainly the media is vacillating back and forth...the media has been very bearish, then proclaim the bottom is in, etc. Obviously no one knows for sure what will happen next. What I do know is that people have begun to "think" about the market...at this point they are not in panic mode. What I'm hearing from friends is that their financial advisors are advising (those 50 & older): if you are worried about the market then let's reduce some risk. SOOO this leads me to my non-charting analysis...if you were a financial advisor were would you have "orders" in the system to reduce your clients risk? If you were a swing trader and caught this last bottom where would you be selling to take profits? If you bought the 4K dip because you knew this gap would clear eventually and this was your "signal" to go long, you went long and thought you found the bottom because of the strong May 23rd rally but then the market proceeded to make a new low in the 3600 area; where might you be pulling some risk if you are questioning your 4K purchase? The answer to all these questions IMO is 4000-4150; some even see 4300-4400 as a possibility. (Most of the charts I'm seeing this weekend re:SPX/SPY within TV are calling for a greater than 4K retracement level this week & next). These are the questions I ask myself and it leads me to believe the market won't hit this nice round number people are expecting before we see either a re-test at 3636 or make a lower low because of the sheer number of "sell orders" that the market makers can see for people looking to reduce risk or selling into the strength. IMO last weeks rally squeezed out all the "late shorts" so the number of people "short" below 4K is probably fairly low. Lastly, we are also starting Q2 earnings season in July...Q1 earnings season produced a 7 week long bear run and April was a straight up bearish month; could July follow suit? Don't you think lots of traders remember those 7 weeks of hell if they were bullish on earnings and they might now be looking to reduce risk before going into the start of Q2 earnings season? Personally, I just don't see how Q2 earnings & conference calls will be any different from Q1 at this point.
Welp...that is my thought process as to why I am looking for sell set-ups now/this week as we begin Q2 earnings season.
I could be completely wrong and I will have my SL's in place and may loose some money on this thought process...hope you enjoyed my brain dump.
So here goes it...my non-charting thought process as to why I don't think SPX will get to 4000 and why SPY will not get to $400. (From a charting perspective you can view my last two posts about wickless gaps and how I see those as continuation patterns, etc, etc.) Anyways, most people that know me personally know that I'm a full time swing trader so a lot of people have been asking me about the market and what do I think. At the hospital where my husband works people have been asking him "what is your wife saying about the market". So the general public is starting to worry about the overall stock market health and certainly the media is vacillating back and forth...the media has been very bearish, then proclaim the bottom is in, etc. Obviously no one knows for sure what will happen next. What I do know is that people have begun to "think" about the market...at this point they are not in panic mode. What I'm hearing from friends is that their financial advisors are advising (those 50 & older): if you are worried about the market then let's reduce some risk. SOOO this leads me to my non-charting analysis...if you were a financial advisor were would you have "orders" in the system to reduce your clients risk? If you were a swing trader and caught this last bottom where would you be selling to take profits? If you bought the 4K dip because you knew this gap would clear eventually and this was your "signal" to go long, you went long and thought you found the bottom because of the strong May 23rd rally but then the market proceeded to make a new low in the 3600 area; where might you be pulling some risk if you are questioning your 4K purchase? The answer to all these questions IMO is 4000-4150; some even see 4300-4400 as a possibility. (Most of the charts I'm seeing this weekend re:SPX/SPY within TV are calling for a greater than 4K retracement level this week & next). These are the questions I ask myself and it leads me to believe the market won't hit this nice round number people are expecting before we see either a re-test at 3636 or make a lower low because of the sheer number of "sell orders" that the market makers can see for people looking to reduce risk or selling into the strength. IMO last weeks rally squeezed out all the "late shorts" so the number of people "short" below 4K is probably fairly low. Lastly, we are also starting Q2 earnings season in July...Q1 earnings season produced a 7 week long bear run and April was a straight up bearish month; could July follow suit? Don't you think lots of traders remember those 7 weeks of hell if they were bullish on earnings and they might now be looking to reduce risk before going into the start of Q2 earnings season? Personally, I just don't see how Q2 earnings & conference calls will be any different from Q1 at this point.
Welp...that is my thought process as to why I am looking for sell set-ups now/this week as we begin Q2 earnings season.
I could be completely wrong and I will have my SL's in place and may loose some money on this thought process...hope you enjoyed my brain dump.
Comment:
Forgot to say that I have also been closely following the 10 year treasury & the Dollar. Neither have broken down on a meaningful timeframe...both are holding support right now and making higher highs & higher lows. Because both these are at support the risk/reward of a short set up makes sense.
Comment:
Welp, SPX got to 4012 & SPY got to $400.18 for a very, very brief period of time and then reversed. What I didn't consider when thinking through my thoughts earlier was summertime trading and what can be accomplished with low volume. So 4000 was hit but it was very, very brief. IMO if we revisit the 4012 again then I do believe 4,150 can be accomplished.