Very good blog with backtest of Friday's gap up action in SPY. Summary is that this pattern has made profits in the long side after the 2009 bottom but longer-term it lacks significance. My guess is the market will go lower in the next 10 days for about 3%.
Ok, lets add it up. Made profits in the long side after the 2009: chance of going up = 1 longer-term it lacks significance: chance of going up = 0.5; chance of going down = 0.5 Overall: chance of going up = 1 + 0.5 = 1.5 chance of going down = 0.5 1.5 > 0.5 therefore chance of going up greater than chance of going down Why do you guess it will go down ? Don't you trust your own data ?
Absent hyperinflation stocks are terrible risk reward, long term bonds will hold, stocks will fall, manipulators always lose, manipulators wants inflation, manipulators will get no inflation.
Trying to buy S&P now is non-sense You need to find markets that are the start of cycle, not near the end Trying to short S&P now is non-sense You need to get confirmations that we are at the top and it is impossible to know it right now. Perhaps you would know it with a lag of 3 to 6 months at least. Who knew we were at the top in oct '07 ? Noone. At the start of '08, you could have speculated it but market was already down 10% from highs. To resume : lot of people ready to lose lot of money. Chris Mac
10% is a lot to pay for confirmation, and even then it might be just a correction, odds of success are better now
The market keeps going against you. How is that good odds ? Would your odds improve further if the market goes another 1000 points against you ? This is how noobies get wiped out. They don't know when they are wrong.
I dont mind being wrong when I dont do binary bets, I am net short, but my shorts are part of a larger strategy
This is a market no one has ever seen before....thanks to the central bankers....will there be a top? There always is...