I ate it for a -30% loss on an OEX call option day trade position on Friday. Most of last week there was enough "end of day rebound" in the market to give me some profitability on long positions, but not on Friday. Today the OEX didn't hit its entry trigger for a long position. Today was the first time in the life of this intermediate term uptrend (which began in late July 2006), that the OEX retraced all the way down to the 50 day simple moving average. It did this with 6 consecutive down days. When the largest 100 stocks (OEX) in the SPX start visiting the 50dma, it won't be long before the SPX and DJIA follow a similar retracement pattern. (The COMP has been retracing to the 50dma since Dec-06). What this means to me, is a removal of my bullish trading bias and a move to a neutral bias with both longs and shorts incorporated into my day trading system.
I am still bearish at these levels generally speaking. However, a bid within the next few days would not surprise me either. But, I won't look for a full turn around to new highs for another few days possibly. JMO There's still more give back before a "full bid" comes back into the market.
What if we have a multi-month or yearish correction? Or is that not a possibility anymore, because everything 'is different now?'
RSI(5) is above 70 for VIX. the last 4 occurrences in the last 6 months marked S&P bottom practically to the day. there were a couple more occasions when RSI did not quite make it to 70 and those all marked S&P mini-bottoms. i predict a broad market rally that will last at least a week starting this Tue or Wed.
Who's saying it's not a possiblity? The statement was meant as a general bias.. What's different now? The only thing that changes is the price.
Those RSI trades have worked well the last couple of months. Tomorrow is going to be a very interesting day. If we dont get a bounce we are going to head down very quickly.
my investment accounts are 35% long stocks, 10% long commodities, and also have a 5% short position so, i guess that's net 30% long with 50% cash my swing accounts are 80% long , with tight stops in place and my daytrading futures account is 100% cash, as it almost always is upon close. to answer your question
Bulls are still too complacent, we need to have a nice ramp up to make a lower high, suck a bunch of new hopefuls in and then break to a new multi day low on some decent volume (maybe a few of these) to get a correction worth talking about. EMs are looking more shaky than they have in a while and yet it doesn't seem to be worrying anyone yet. Subprime blow up maybe starting to creep in to higher grade paper but Barrons was reporting that everyone was expecting it so it wasn't a surprise and thus contained (yeah tell that to those in NEW who had a 50% haircut!) If the yen strengthens, EMs continue to lose ground, and the subprime rot starts to spread in to higher grade paper then things could get interesting.