Time to short the Dow?

rglenn

Well-known member
379 4
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.
 

tradesmart

Experienced member
1,286 22
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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tradesmart

Experienced member
1,286 22
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:
 

ChartMan

Legendary member
5,580 46
15/16K in 2008/9?
 

2468steve

Experienced member
1,076 39
CM,
15/16k in 2008/9.....phew thats a relief to all those who are short,including me...the way this market is behaving thought we may see it nearer Easter....lol
 

ChartMan

Legendary member
5,580 46
Only a guesstimate, of course.... I'm not sure if there's enough Bulls to make it by Easter though.... Nice thought though, all the same. 50% in 3 months.... When was the last time that happened? Did it ever happen? The last 50% move has taken 9 months- give or take....
The best I can find is 50% over 1 year, approx.
 

ChartMan

Legendary member
5,580 46
Talking of bull flags.... Take a look at the long term DOW. There is really only one bull flag that I can see, followed by an inverse H&S followed by a false breakout of a Bear Flag. Looks just like an intraday chart....You'd never know...
 

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tradesmart

Experienced member
1,286 22
Impressive charting CM - from the above, I'm beginning to think that we may be at the dawn of a new age of bullishness........ :cheesy:

or does it have to test the lower line one more time before the dawn breaks.........?!?:rolleyes:
 

Wideboy

Well-known member
489 1
More like an expanding triangle, which we all know is a bearish formation.
 

ChartMan

Legendary member
5,580 46
Yes, the last formation is an expanding triangle. I'm not convinced that you can call it Bull or Bear, on any chart. What you can say, according to books, is that it leads to high volatility. That should be a welcome outcome, whichever way it moves. To have a Bear outcome, it would mean going sub 6000..... To go Bull, we only have to move up a few hunderd points with a pullback to 10K ish..
 

tradesmart

Experienced member
1,286 22
Adding RSI to the longer term 5-day chart, the divergences appear to work in exactly the same way as in shorter time frames aiding the longer term position trader........

as ChartMan said, it could be an intraday chart if you ignore the numbers on the side...

judging from the current RSI setup, we may not be at a serious retracement inducing top yet, but the next few weeks could be critical imho..........

to have held a decent sized long from the March low, trading from the attached chart, would have brought a very nice Xmas bonus.....but hindsight is a wonderful thing..... :confused: :cheesy:
 

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tradesmart

Experienced member
1,286 22
Hmm……had a mixed day today and a very apt ‘New Years’ reminder that complacency is immediately punished………! :confused:

Went short at the 3-peak ND top at 10525 and held as it bounced along under the 100ma thinking it would go 90-100points on the basis that they would give the excellent ISM data news a good selling, and there was also a breach of the lower uptrend channel line that has held since November, to add to the downwards pressure.. :cool:

Detected 3-peak PD at around 10432, so confidently covered short and reversed to long – WRONG MOVE! – it promptly tanked another 40 ish points, so got stopped out bigtime….. :mad:

Another 3-peak PD bottom formed at around 10385 ish, so took a small long (lacking confidence now!) and closed at 10420 for 25points on the ND when it baulked at the 100ma.

Apart from a ‘selling the news’ job, I suspect that the index has reversed as it tested the top line on the multi-year 5 day chart above – plainly a very significant line, so fairly predictable I guess…!

No major data on Monday so a retest of 10500 maybe? – it seems to like double-tops and also I’ve noticed that when the good news has been sold, they like to buy it back ‘cheap’…… :cheesy:

or maybe not..... no 'dead certs' here

ps - US commentators are citing "tax related selling" on the first trading day of the new year as the reason for today's tanking, but I note that last year on the first day the index rose 265.89 points, so maybe they are talking bull......just maybe! ;)

pps - it's a calling..
"Most analysts are calling for the market to rise between 5 percent and 10 percent next year, but I think it could be more like 15 percent," said Michael Carty, principal at New Millennium Advisors. "The economy is heating up, the employment picture has been improving and companies will begin spending more."
 

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Skimbleshanks

1
2,325 16
The top may soon be with us - newspapers have started the typical 'buy stocks' articles aimed at the retail buyers.

Today's Daily Mail, p6, includes the article 'It's time to buy stocks investors are urged'. Notice that this is not on the financial pages - it is early on in the main body of the newspaper, so it is aimed at the ordinary punters.

The bull market has been with us since March, and having ridden the trend nicely, I expect the big boy institutions are looking to offload millions of their longs. Difficult thing to do. Unless ... yes, of course, let the retail punters get stuck with them.

So the big boys start a bit of a PR campaign, to get all the 'investors' to believe that now is the ideal time to enter the market again. They enter, and the big boys sell them all their stock. Then the market turns. Result: big boys laughing, retail investors holding long positions bought at the top. Works a treat, every time.

The more articles which appear, the nearer we are to the top.
 

sandpiper

Well-known member
458 54
Skim,

All very true. I reckon that the UK based big boys are waiting for Channel 4 to run another series of "Show Me The Money" so that they can dump all their inflated crap on the small guys and gals.

As soon as that appears in the TV guide I'm dumping everything I've got.... ;).
 
 
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