Bulls were amazing today, were they not? Reverence and props to the bulls on today’s chart, they deserve it. However, I wonder what Goldman Sachs will be telling their high networth clients when they find out all those billions will soon be in a campfire keeping them warm from the hungry bears. It’s only a matter of time.
Let’s consider though, one day does not a market create. Ask yourself the question, is it feasible for 1 day to deny 2 months worth of trading? Of course not, that is stupid.
We continue to trade under a Bearish Head and Shoulders Top. In fact, on the weekly chart, bulls have not yet taken the market up a sufficient amount to test the neckline resistance yet. Worse, yesterday we just had a Burial Cross of the 50 day moving average breaking below the 200 day moving average. In other words, today’s stock market movement is little more than a spring back within a greater downtrend until proved otherwise.
Commit to memory, the trend is your friend and the trend is still down. Stock trade with the trend.
I am for ever and a day amazed at how lots of investors will get terrified out of their short positions because of one day like today. From time to time trading is tough like it is today. You need to burrow your heals in and proclaim, I will not be scared out of my short position until the stock market tells me that I should. As long as important resistance levels have still not been taken out, this stock market is in a downtrend. As the market is technically in a downtrend, I will not get petrified out of my short position.
You will notice that if you have the restraint to stick to your stock trading method, you will get 75% of your calls right. The test is to be able to stick with your trading system when the market moves in opposition to you. The test is to have no preconceived notion, no optimistic bias and no bearish prejudice. The basis for why I’m short this market is not because of politics, not because I am a gold bug, and not for the reason that I am a want to be economist seeking to predict the future. I am short this stock market because technical analysis tells me from an dispassionate point of view that this market is in a downtrend. I’ll be long this stock market when technical analysis tells me the market is in a bull run. No feeling. No commitment. No predisposition.
In the video below I will update you on the S&P 500 and explain the reason why I believe this market is still in a downtrend.
“As the market is technically in a downtrend, I will not get petrified out of my short position”
Petrified means to be frozen in place. You can’t be frozen in place (petrified) and “get out of a short position” at the same time. If you were petrified you’d still be in your short position.
<>
Petrified means frozen in place. You can’t be petrified ( frozen in place ) and also get out of a position.
Great presentation,
Price still under MA200, which is a popular gauge for bull and bear force,
as long as price still below MA200, then go for the bear.
Thanks.