Exactly! I mean, that must be what he's going for right? There is no reason I can see to be long right now, except if you want the absolutely GREAT feeling of picking the bottom. That is the only thing I can reason out of this. So, if you are going to bottom pick, you would buy as each new swing low is made, right? And get out at breakeven (or less, heh) if the trade comes back against you? Or...you could trade with the short term trend until you see the price fail to take out the last swing low, and take out the last swing high, at which point you switch your bias to long and up and away you go! Except that it didn't happen today. I mean honestly, why would someone make this call?
I suppose so that they can have a thread that is popular and talked about on ET....LOL This person will probably claim victory tomorrow if the SPY goes to 111 and say,..."See I made $35,000" when i sold at 111. Its laughable.
Well, there are obviously two sides to every trade. It all depends on your timeframe and ability to stomach a potential drawdown. The machines did not buy at 1,101 today as they did when the SPX hit the August low. It broke slightly below 1,100 so the bias is obviously still down.
Listening to fast money and they said markets going a lot lower, Guy Adami says 1020 on the SPX which I agree, however there will be bounces on the way which will have to be sold if you are going long on the dips! I just have that feeling that if the SPX does get down to 1020 that the chances of it breaking 1000 is extremely high.....at least a 99% chance!
I have been buying SPY for the last few months. I am currently long over 5,000 shares. My next buy point is 105. My SPY position is currently against me over $77,000. With realized profit from hedges and dividends I am +$7,000, and my current open hedge is around $7,000, so the total current drawdown is closer to -$61,000 which helps a bit. But I'm not worried. For all of you guys who can predict direction, this may not be the best strategy. For me, who cannot predict direction, it is.
Who said anything about PREDICTING? Just look at the trend...follow the trend. For there to be an identifiable trend it by definition has to have already started.
True. The guy averaging down would just be better served to use something simple like a 20 period MA combined with the 200 period MA. At the very least, it will keep you long or flat (since the guy doesnt want to be short). To simply, sit there and take the heat as the market goes down is foolish. It was this sort of failed logic that ruined guys in 2008 and 2009. None of them believed the market would break 1000.