Well guys, I'm afraid thorn is CORRECT AGAIN!!! I just checked my indicators and effective tomorrow I will be out of my longs in the market. This doesn't mean we will go into full fledged bear mode, it does mean we will have a decline strong enough that I do not wish to be a holder of longs.
If you are determined to sell your longs tomorrow, consider selling covered Calls against your long shares instead. You may be able to enjoy a higher selling price while allowing for downside protection through the premium you collect. If you believe we may REALLY tank, pick a strike price that is deeper in the money. You will be effectively shorting these shares without the risks of traditional shorting and to a limited extent, you may participate in some upside movement (again, depending on the chosen strike price). Just something to consider. Good luck in your trades...
Here's the way I see it using the SPY's 1.) The market's run since late July, gaining about 13.5%. There have been some minor corrections along the way, but we haven't seen a major pullback since July. To use a baseball quote, "we're due". 2.) The underlying economic fundamentals aren't that good. GDP growth has declined for the last two quarters. 3.) Housing -- which accounts for one third of household net worth -- is getting clobbered 4.) Today's productivity report indicates the the productivity gains are slowing. 5.) Using down Gann angles from the recent highs, the current price is between two of the levels, indicating the price action has to either drift higher or lower.
we are around 35points away from the highs and given we got less than 2 months left the chances of hittin' new highs for the yr are slim or none, and slim just had a fatal accident. patterns also aint that healthy+leaders in trouble...and we got stk3dr startin' a thread about how bull this mkt is, that decreases the odds even more.
oy vey, 1390 - 1367 = 23 pts. If the chances are "slim or none", why are the Dec 1390 calls trading in double digits??
dont mean nothin'. not long ago when sp was at the bottom before fed meetin' [and first pause] there was still very heavy volumes on the 1225 strike and we know what happend next. still, am not bashin' your call, just sayin' the odds dont favor much more upside after this humongous run.
Oh, then we are all to assume, based on your assessment that "the odds don't favor..." that you have sold many Dec 1390 calls and will collect double digit premium. Wow, trading this market is ea$y for you.