My plan is to chillax, sit on the stocks i bought last week, and observe. There is no edge in the market and managing risk is not easy with the threat of huge, nonsensical, illogical, the chart means nothing moves. The best plan is to let the dust settle and try to pick up some clues. in the mean time i will me managing the rest of my swings that im in an just daytrade till the things settle.
Keep an eye on the 200 day moving average and the February & November lows. How the market reacts at these levels will tell us what to do. When markets get messy…..charting, support/resistance is pretty much impotent. Markets can get more oversold and then continue getting more oversold…knifing its way through every support leve.
We will get a bounce here, but I wont’ trust it unless it’s on strong volume or blows past the 50 day moving average….We are currently gapping up 4% if we see some volume follow through then maybe the structure of the market can revert back to the old from 2 weeks ago. Not likely, but stranger things have happened.
If the bounce is weak, I will likely look for shorts close near the SPY 50dma.
Take a look at stochastics.We are not even oversold yet!!! The possibility of more weakness, or a second leg down after a bounce is real. Even with this EU news if the bounce is weak then the powers at be do not want this market to go up. If we follow through with volume and some strenght across all sectors then we got a chance. Again, keep an eye on those February and Novemember lows as possible support for oversold bounce or kunalsnapback plays.
PS: OIL is gonna squeeze the faces of unsuspecting shortsellers. ANYTIME IT GOES IN THE 70S you need to add that! Im loaded to the gills with UCO and will add on all dips close to 11.50
courtesy from the nice folks at finviz…when playing abounce i like to look at the strongest sector or the weakest… Basic Materials got nailed.
With the market gapping up today…its gonna be hard to chase things…Let the dusk settle and then we will have to find laggards to play. But play things quick…sell bounces or keep raising ur stops and taking back cash on profits.
