Time to short the Dow?

GeckoTime

Member
70 0
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?/
 

suggy

Active member
133 0
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.
 

GeckoTime

Member
70 0
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?
 

tradesmart

Experienced member
1,286 22
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 ;)
 

grubs50

Well-known member
408 0
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
 

ChartMan

Legendary member
5,580 46
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...
 

china white

Established member
979 12
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 :)
 

GeckoTime

Member
70 0
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!
 

GeckoTime

Member
70 0
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
 

tradesmart

Experienced member
1,286 22
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!
 

GeckoTime

Member
70 0
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 :-/
 

rglenn

Well-known member
379 4
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!!
 
 
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