What I don't get is this. OP why are you trying to time a reversal without any significant support level, or moving average? Also, why jump the gun in such an environment? I don't understand the benefits of trying to time the bottom of a market. When you could wait a couple more days, see an engulfing pattern, and then execute a trade. It just seems more practical, and not as risky. I am going to avoid taking risky gambles. Intra-day is certainly not my thing. When I see a reversal formation start forming. I'll mention it in my video's. In the fitrade thread. But, for now. I see no signs of a reversal yet, and therefore I can't buy stocks. Just can't do it, not worth the risk.
I know H&S as a general shape. Is there supposed to be a ratio between shoulder height and top of the head? And you mean inverted head and shoulders here right? (sorry, I'm not too familiar with chart patterns)
I cant tell if you're being sarcastic since you mentioned average down for several WEEKS lol... If you're serious then wow I hope that hedge is solid. I'm more of a short-term trader and wouldn't really average when the mkt is 100 pts against me lol In other news, let's see how that 1140 holds... I'm not buying this until 1105.... Too much momentum to be catching knives imo... Patience is key
I don't want to think about it in terms of patterns. Rather think about it mathematically, economic numbers and historically - 200 points move down in 2 weeks. Unemployment numbers have not gone to -400k, housing prices have not dipped -10%, banks have not failed, other countries are still buying treasuries, S&P companies house is full with cash - no reason for markets to drop so much so fast - even if eventually (for the sake of argument) lets say markets go and touch upto 1050 also. Markets did not fall this much in the following days after the D-day of 1987 also, neither after operation desert storm also. Guys who run big money want to buy when there is blood in the street. They don't look at any patterns to form. As soon as this selling climax is done, we will have fast rallies. not sure on the followthrough on the rallies though.
What is happening today is basically the market reaction to series of ratings downgrades that are happening and will happen to muni issuers, fannie, freddie etc. Surely individual stocks get hit but this is not enough reason to sustain a broad market sell-off.
Because it makes money over time. It's not 100% reliable, but I have made a lot more than I've lost by buying unleveraged during the height of market panics, then sitting waiting for a strong rebound and fear to dissipate. Waiting for a rebound means you miss the bulk of the gains, without any guarantee that the market won't turn back down and stop you out again. Anyway, I am often a bit early and lose on my first or even second attempt, only to catch the bottom eventually and score a big gain. It won't be the first or last time this happens, I'm just following my strategy with limited downside risk.
Ghost, I think at this point in time, we are very near to capitulation and it might be well recommended that you increase the risk you generally use - so instead of using 2% , maybe use 3% or even 4%. Just my suggestion.