No watchlists, charts, or predictions tonight as I’m feeling a little under the weather and slightly tired for some reason, so I’m just going to ramble for a few minutes before signing off. After the close yesterday when I was going over the charts everything I saw looked like a train wreck. It seemed like every sector’s chart was trashed and it looked like everything was going to collapse going into the close today. I remember thinking to myself “why would anybody want to be long a stock ever again.” Maybe that should have been some type of clue that the market was going to rally +250 today.
i refused to consider going long as all my signals point down and I didn’t want to get caught in any significant follow through to yesterday’s selling. The problem with being bearish in a declining market is at some point there aren’t any good short setups and you start to force the issue sometimes and get caught. Towards the end of the day I put about 10% of my capital to work in short positions and quickly found myself in the red. There was a good quote today on Twitter by Higgstrader saying,
I was reminded today in bear markets the best long side opportunities do not come from long set-ups but from a lack of short set-ups
This is a excellent contrarian attitude to guage when to either stay in cash, cover your existing shorts, or if your aggressive, initiate some longs to ride the counter-trend bounce. Today feels like a bounce that may continue into the open with momentum from Apple, but I’d be weary opening new longs right now. I think I’m going to ride out the few shorts I have and see if they hit my mental targets, and let the market come to me.
I have some alerts set on stocks I’m watching on the long and short side and we’ll see which alerts get triggered and use that as my guide as to which way to play this market. It’s been hard to get a read on what the market is going to do tomorrow so I’m not going to do much and that is a great policy.
Gold and Silver stocks are looking bullish again and not as volatile, so I may focus my energies on those sectors instead.