Even measured with a very large stop loss the risk / reward ratio with almost 2 is still higher than going long here before the FED meeting on Thursday. Therefore the best trading opportunity is a short into this large empty space.
Entry: 1997.5 Stop loss A: 2069.5 (very wide stop loss) Stop loss B: 1997.7 (very tight stop loss) Target: 1855
P.S. With the very tight stop loss B at 1997.7 the risk/reward is 712 !!!
fwiw dont think this fed decision will have a huge impact -- well see. Saying or supposing what institutions are doing here is ill-founded because I know several that are still bullish so that does that tell you? (answer is not much)
LastBattle
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trade technically :D
yellen have been proven to be just hit air again and again. Rate hike threat since 2012
ChartArt
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let's see, my chart is only 25 minutes old and I already lost two followers since publishing it, it seems everyone is bullish suddenly ...
LastBattle
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They'll be the ones that'll lose out then :)
Who is seriously buying this shit at this level? All institutions and smart money will have their sell orders waiting on top for dumb retail to buy into.
Common economic theory says that bonds compete with stocks for investment funds. So if no hike again, stocks should go up right?
No. Not so fast, market sentiment trumps everything. If FED does not hike rates, it will only result in short term rallies in stocks that will be sold off in a week.
There are also times historically when the FED hikes rate and market still continued to rally. [I think a lot of us have been through this after the 2 years of bear market in bitcoin.. haha, but this might be the very first bear market people face in the 'real' stock market]
-A bull market ignored all bearish news.
-A bear market ignores all bullish news.
Unless the FED announces QE4 by printing money again, then I will close out my shorts immediately and surrender. No one can beat its printing machine.
SPYderCrusher
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"Common economic theory says that bonds compete with stocks for investment funds" definitely, completely not true fwiw
SPYderCrusher
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LOL never mind I'm an idiot I take it back. I misread and though you put *NO* common econ theory says they compete, I was like ummm what. Sooo sorry haha my mistake.
LastBattle
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We've been through the nasty bitcoin's bear market for the past few years :D for some it may be the first one that they've ever seen in the 'real' market.
It'll definitely take some time for them to see....
ChartArt
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Yes, the Bitcoin market taught me it's not only shiny and happy all the time. Once everyone sees their profits fading there is only a run to the exit ("If FED does not hike rates, it will only result in short term rallies in stocks that will be sold off in a week." ) there you go. If the FED delays their rate hike it might cause just a brief rally. If that rally doesn't break the last all time high from May, then the only direction for this market is down. The delay would only be a welcome ramp up, as you said: "institutions and smart money will have their sell orders waiting on top for dumb retail to buy into."
ChartArt
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But I am open minded. If we get a rally with a rate hike delay and the they delay AGAIN in December and also in early 2016, that would be the only scenario in which I would get optimistic that this market recovers for at least one year.