Time to short the Dow?

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GeckoTime

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Would like some informed opinions on this. I think the Dow is long overdue a correction as is always the case in a rally, but am querying whether it will go up a little more before it comes down, or whether today is good timing. Think it could easily go down 100-150 points from current levels (and probably even breach 10,000). My downside risk is that it goes up by as much as 100 points before it goes back down. These are my non-chart thoughts.

Is anyone else short right now or thinking of being so, or is there more to this?/
 
thought it was time to short the dow a couple of weeks ago. cost me a lot. trade what you see not what you think. preconceived ideas will make you pay.
 
Yes, I see the Dow has gone up pretty much in a straight line since 21 November. A correction is overdue, it's a case of when rather than if. Any other thoughts?
 
Well, if you'd gone short at the top yesterday *10137*, you could have covered this morning at 10091...! :cheesy:

A nice short in my book, and if you'd gone at $100/point, it might have payed your Xmas beer money....... :cheesy: :cheesy:

There have and will be retracements, but since March the line of least resistance has been up, so long positions have been more profitable.....

However, we had a clear double-top last night at resistance, so we may see some downtick today on profit taking.....

All you can do is enter a trade and see where it leads, adjusting your trailing stop as you go to protect profits...

Sadly, there is no such thing as a 'dead cert'..... :(

But you're right in thinking that a retracement is overdue imho ;)
 
there r always opportunities to short the Dow short-term (monday was a prime example) and personally i think it is bound to happen soon again esp from last night's high
 
I'd be thinking in terms of long, until there is a clear break in the trend.Support at just under 100 right now... res @130. No divergence in ES vol, so we could find a bottom later, and that would have to be sub 100 for divergence....
sit and wait for the divergence, or take a long at 132 break...
 
imo thez a major neg div btwn techs and blue chips at the mo (dow waltzing thru 10K whilst comp unable to even storm 2K again) which has the odds of 80/20 of resolving to the downside (as is usual with the tech leadership). however, i do not expect any big player to unwind big long positions until after Santa is gone :)
 
The time has come. Shorted the Dow today. See my upside as being relatively good, downside hopefully limited to no more than 100 points (stop loss just after that level). The Dow is ripe for a correction on every measure I am looking at, both on an intra day and 6 months daily basis, inc RSI, Bollinger bands, and resistance at 10200 on Fib, as well as just a look at the price history chart.. now I've got my fingers crossed!
 
The Dow has moved about 450pts up in just over 3 weeks. That is a) not sustainable b)too much too fast on no real new news and c)pretty much in one straight line. I am not really a chartist as such, IMO for what it's worth the 10,000 barrier has been breached fairly effectively. I am looking (hoping) for a correction in the region of 200pts from current levels back down to 10,000
 
Good Luck Gecko Time - hope you're right and that 10200 ish is a short term top prior to a correction of a few hundred points.......

Looking back, corrections of this order have occured quite frequently since March, whilst the bias has remained to the upside......

I'm a bit surprised by your stop-loss level though - are you sure that you want to risk that many points if you're wrong....?!

Things are very bullish..... :confused:

At worst, I work on a 1:3 risk/reward ratio i.e. risking 30 points to make 90.....however, if this sinks 300 points from here, you're about right I guess!
 
tradesmart, thanks for your thoughts. Maybe you're right about the magnitude of the stop loss, but with a 12 point spread on the future I don't want to be making too many trades, so am willing to take the pain of a continuing rally to the 10300 point, or 10305 to be exact ;-)

It's impossible to time these things accurately, so don't want to get stopped out if there's a 50pt rally tomorrow and then it tanks on Monday. If I lose 100 points I can take the hit to the balance I figure :-/
 
This is where intraday systems stand apart. As you are only risking a daily amount.

When the Dow is raging like this if you are on the wrong side for a few days you are going to get hurt-real bad!!

It appears next year will be a raging year- and we could see days when 200-400pt moves become the norm.

Be very careful with long term trading strategies on the Dow in the new year!!
 
rglen, what makes you think that next year will be so volatile?

regards.
 
The confidence in the markets are returning- therefore we will see bigger moves and bigger intraday ranges which was prevalent before the bear market fall.

This is quite evident in the recent rises in all global markets.

The previous falls we have had in the markets these past few years will not be seen again for a long time to come- if ever.

However, this does not mean that the markets won't fall a few hundred points in between as they progresses upwards. This is all part of the natural cycle.

Of course this is my opinion and should be taken as such.
 
Perhaps significantly, the best trade today was short, with a bounce at the end off the lower uptrend channel line - as/when the line is breached it will encourage a further deeper retracement imho (and quite overdue!)

In the overall uptrend since March, there have been several good shorting opportunities for a few hundred points, but plainly the best trades have been long....and barring disasters, this may continue into the New Year......the bulls are already talking about Dow 11000, and from this months progress they may be right sooner than later...... :eek:
 

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There is certainly some top side resistance
 

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NB - nice chart - you could draw another line parallel to your top line and it would look like a huge bull flag to me...... :confused:

target.....?!?

WOW........... :cheesy:
 
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