first rule of fight club - do not talk about fight club. second rule of fight club - do not short on margin! if we have another up day like this, the short squeeze will cause another multi-session rally in equities.
Interesting theory, but if one shorted (on margin) in the beginning of this downdraft, he or she would still be comfortable after a 2 day bounce no? Not everyone buys the top and sells the bottom. Additionally, as a trader, wouldn't one be taking profits along the way? This may be a short covering bounce, but someones gotta buy from the stock that will be for sale up around the 1250-1260 area. Mutual funds are not buyers here, as they have no cash to buy with. The hedgies are immaterial at this imho. Happy trading!
some good points grimey - i need to see 5 consecutive sessions of bullish bias before I will call an inflection point (reversal). This is KrazyKarl's rule-of-5. The intermediate trend has been bearish for the past 6 weeks, the past few sessions could be: -a sign of reversal to continue the longer-term uptrend -oversold bounce KK's rule-of-5 will tell. I just wish I had more experience translating market internals - I have a feeling that the A/D line and price action would sway me in the right direction for the call....
The large correction the past few weeks was the market forcasting something: the fed will raise 500 basis points in June - then be done for the year. Discuss.
I think this is a perfect setup when the feds raise then pause. Markets will go higher: DOW: 11600 SPX: 1330 Russell 2000: 780 then next huge downleg (if that). Getting ready to start putting in money on the Nikkei, too.
As always...over and over and over...etc, etc... Buy the Dips - Sell the Rips Long the Trounce - Unload the Bounce Grab the Thud - Sell 'em Fast, Bud In the Submarine - Get Out, Get Clean Hit the Dump - Sell the Pump Grab the Slam - Sell the Bam Dive Into Hell - Ring the Bell ...So on and so forth... $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$