Choppy to lower prices ahead.
1. Low readings on VIX imply that investors are complacent. A spike in VIX up 5 points would create a tradable bottom for 3-5 days.
2. Crude Oil is at the high end of its historical range and it has a lagged, negative effect on the overall stock market.
3. The long slide in metals, specifically silver , shows that investors have thrown away their silver together with their bonds. After stocks outperform relative to metals, it is wise to expect a different tune for at least a month or two.
4. yields are at their lowest levels in 20 years relative to 12-month trailing returns on assets in the S&P500 . The median return on the S&P500 is roughly a 3.5% return on assets. That is not worth taking the risk of a 20%-40% decline the value of your holdings in order to return 3.5%. More on this in later updates.
I wish I could tighten the stop closer, but using roughly 3 average daily trading ranges is about as tight as I am comfortable with. If we see a spike up in VIX of 5 points, I would recommend cutting the short position and re-positioning on a bounce.
Tim 2:15 PM EST, Wednesday, August 14, 2013
1. Current price relative to past quarter expectation of future earnings are really just confirming that outlook today.
2. As on the chart, the price may or may not continue in the direction of lagged prices, so the current outlook is what drives price in the sense of price peaks (eg your comment about Walmart)
3. As far as a trend indicator, this may be more insighful than the 50MA and 200MA folks use. And knowing that three quarters of earnings reference definitely helps as a frame of reference (esp when considering market tops). Which I think is a neat.
I may not be seeing something here, I'll think about it some more.
Thanks for replying :)
As I would agree that the markets are showing signs of toppiness, I'm not sure that it's ready. One thing I do know is that the markets will always surprise you.
I think the big question is what will happen in October. Often people associate October with crashes but October can also be a bear killer. Not sure if this will embed but here is a interesting video from back in 2011. Link: http://www.dailymotion.com/video/xlj8vd_october-the-bear-killer_tech
<iframe frameborder="0" width="480" height="270" src="http://www.dailymotion.com/embed/video/xlj8vd"></iframe>
It's been an amazing year for traders. Just keep doing what you've been doing but keep everything a bit tighter as we approach the 9/11 anniversary and of course the treacherous month of October. Best of luck traders.
I've been trading since working as an assistant to a brokerage firm in 1984 and I've tried to just find times when it seems like everyone is thinking one way and has stopped acting on that line of thinking. Then at that time, there is a strong chance of a dramatic move in the opposite direction to the existing price trend. It isn't perfect and it isn't using seasonals, rather, just watching the tape and watching the action of the leading stocks.
Thanks for all the great work you are doing here at TradingView. Your charts are excellent and you are one of the few that I follow. Keep it up!
Wishing us all well to ferret out good trades with group input and to get rid of bad trades faster. Group trading works and I'm happy to be part of it here at Tradingview.
PS - I put an alarm on my phone that rings to alert me each trading day just before the close, just in case I am away from the market or get side-tracked. Hope this helps.