I agree, going long doesn't seem that smart, but as a trader, I'm trying to game the little nuances of the market while we are definately in a strong downtrend. When the market goes down, I buy, when it goes lower, I buy more. I think shorting at such an oversold level is wrong (unless you think that we pierce the lows of april without even one bounce, I think we bounce about 40% of last week's drop first). The time to short is honestly when we go up. Shorting down here just feels like chasing. I ended up getting good opportunities to get out of all my overnights either flat of for nice gains, but it does feel as if lately it's better to just do nothing. It has been really tough for this long only type of guy.
P2, I know where you're coming from. I've been trying to play the LONG pending "oversold bounce" in MXT / PVN since the other week, and have very bloody hands from trying to catch those falling daggers. (I believe you also mentioned trying to play the PVN bounce in another post). I've been cut so many times, I think I've lost any sense of feeling in my hands. But I do see hope in that sector this week...so we'll see. ZBOY --> you mentioned success in swing trading the NDX and SPX options. I've always been turned off a bit from the wide bid/ask spread along with the high commissions that some brokers (other than folks like IB) charge, and thought they were also an "unwinable fight." Any tips you could give regarding how you've been successful with all those factors against you?
The only time you don't fight the fed is at the end of the easing cycle. We're not there yet by a long stretch. Also remember that it is never too late to go long nor short. The market can always get more oversold and more overbought! It follows no Aristatolean logic.
I know how everyone feels, expecting that bounce all the time.. kind of afraid to go short because you just *feel* that big rally coming. But let's keep it simple.. the trend is clearly down. So stay short until the trend is up, or at least "not down." I have done well with shorts, but got burned lately trying some longs. So now I'm staying short and fading the rallies until shorts hurt me like those longs did. Gotta mention those naz and dow charts on the first page of this thread.. very nice, very apropos. maybe time for a straddle or strangle even? PS. "the tape" beats "the fed" any day of the week.
Picking bottoms can be frustrating in a downtrend. It may be better to wait for a catalyst that will cause a shift in sentiment. I am looking for some poor earnings announcements this week from the big tech companies. If the market doesn't go down much on the back of these, it will be time for me to go long.
The support trendlines drawn by tuna start during the late 90's bull market. If we were still riding the raging bull, the markets would rally from that trendline. Or do I hear the 8 second (8 year?) bell going off? Any cowpokes still hanging on the bull's back better know where the exit is. This bull is only getting meaner.
I've found the last few weeks to be the easiest trading I've ever had. Short the rallies. No overnites. I'll stick with it till it stops working.
Take a look at the 30minute NAZ chart. That could be your answer ... Half a cup ... Is your cup half full or half empty? Richard
While there are admittedly larger spreads on options, my time frames on these positions have been usually more than a week, and in some of my current positions 3 weeks. The price appreciation I get on the trades that have gone in my favor far outweigh the losses on the spreads and the bad trades. I probably wouldn't trade these instruments as day trades due to the spreads as you mentioned.
God, this is just unreal. You'd think that a monster rally could carry over at least til the next morning. I was hoping for a gap up to sell the rest of my inventory. Luckilly, I sold most on the close yesterday. Does anyone get the feel that there's one monster seller (japanese?) who just won't quit at all.... Not until he's out of all stocks at any price... Then we can bounce.