No, a thesis isn't necessary, but I'll post a visual snapshot of what can happen when you think price is overextended and trade against the trend without waiting for some kind of confirmation. Also, anyone who puts on a position just prior to an earnings announcement is either a long term investor with great love for a company or a gambler, but not a very smart trader, IMHO.
i am thinking of building a position in faz slow and steady but i will take profit as it goes in my favour.
I bought FAZ end of day and am down about 10 or 15 cents on it. I will buy more at 19 if it dips, but it looks like the low is in. overseas markets are up, but futures are flat/slightly up...
Why does it "look like the low is in"? It closed at the low of the day and the 52 week low. If this was a stock that closed at it's daily high and 52 week high would you say "it looks like the top is in"?
Lets say your bearish. Fair enough, its September and the market has run a bit far. However, you dont know when it will correct and everyone who has tried predicting has failed so far. So what do you do? You trade anything energy related. During the last two market falls (2000-2003, 2007-current), energy went down later then any other sector. In 2000 time period, it went down in the spring of 2001. In 2007, it went down mid-2008. So if the market goes up, then energy goes up. If the market goes down, then energy will follow late giving you plenty of time to clear out of long positions. So go long the ERX with a stop. Its that simple.
Overbought? No need for any indicators. 10 up days in a row on the indices. I've never seen it happen. Doesn't mean we won't have 20, but wow, I've been sitting on my thumbs waiting for the 3-5 day pull back and I'm getting nothing. I'm starting in on some put leaps because I'm getting that giddy 2000 feeling again. Do not listen to me for trading advice- I mean it. You'll lose it all. Al