Black Monday? Bull Monday?
- Thread starter DisciplinedHedg
- Start date
i am short the nasdaq index over the weekend, but i am not expecting a black monday. monday should gap down in the morning but close flat to slightly up. the grind down continues......
best,
surf
best,
surf
Cannot imagine what the average Joe is thinking...
...its quite sad actually. 401k's were pushed aggressively for the past 5 years, and whatdya know. We've given back almost all the gain for the past 5 years.
And the average tech and mutual funds are seeing double digit losses for every quarter this year.
Its just too tough to fight so much downward momentum (the dollar, SEC investigations everyday, etc).
For the past month, I've heard several stories about people pushing back their retirement. Thats a step in the right direction. You can't have the best economy in the world if everyone retires by 35.
During the bubble, you had grandmas and barbers giving stock tips. I would say the equivalent would be those "amateurs" saying screaming yelling they will never invest another penny in their lives.
...its quite sad actually. 401k's were pushed aggressively for the past 5 years, and whatdya know. We've given back almost all the gain for the past 5 years.
And the average tech and mutual funds are seeing double digit losses for every quarter this year.
Its just too tough to fight so much downward momentum (the dollar, SEC investigations everyday, etc).
For the past month, I've heard several stories about people pushing back their retirement. Thats a step in the right direction. You can't have the best economy in the world if everyone retires by 35.
During the bubble, you had grandmas and barbers giving stock tips. I would say the equivalent would be those "amateurs" saying screaming yelling they will never invest another penny in their lives.
Let's see:
- the averages broke under 1998/2001 support on heavy volume. The next support is... off the charts;
- the buy-and-pray crowd already badly mauled by the bear is getting hit with Dow 8000 headlines. MF switchboards are going to get real busy tomorrow... As the pace of redemptions accelerates throughout the day, MF managers are going to have to sell futures as a hedge...
- the VIX stands @ 43, the VXN @ 61. The 52-week highs are 57 and 99 respectively, and those are unlikely to hold;
- as of Friday, the SP500 P/E stood at ~34. The all-time low is 5.9 [sic] reached in 1949....;
Although I am very good at picking intermediate bottoms, I dare not pick this one. Nor do I think the recorded stock market history is of any guide. In fact, I believe we are about to make one (although not necessarily on Monday). Here's a couple of scenarios to look for on Monday:
Bull Trap: The market gaps down at the open, and stages a rally closing the gap and perhaps then some, then takes a nosedive closing at the lows of the day.
V Bottom: The market opens sharply lower and heads low triggering a trading halt ~1000 Dow points below, then reverses itself and closes at around Friday's close, give or take a few percentage points.
Of the two, the bull trap scenario is both more dangerous and likely to occur. A few tips for the Monday's trading session: Do not assume that a) the market will bottom out on Monday however low it might go, b) your orders will be executed as entered c) you will receive timely execution confirmations, d) your quote feed accurately reflects what is going in the exchanges. Do not use market orders. Do use hard stops, route them directly to NYSE and AMEX. Wish you all good luck, you will need it.
dis
- the averages broke under 1998/2001 support on heavy volume. The next support is... off the charts;
- the buy-and-pray crowd already badly mauled by the bear is getting hit with Dow 8000 headlines. MF switchboards are going to get real busy tomorrow... As the pace of redemptions accelerates throughout the day, MF managers are going to have to sell futures as a hedge...
- the VIX stands @ 43, the VXN @ 61. The 52-week highs are 57 and 99 respectively, and those are unlikely to hold;
- as of Friday, the SP500 P/E stood at ~34. The all-time low is 5.9 [sic] reached in 1949....;
Although I am very good at picking intermediate bottoms, I dare not pick this one. Nor do I think the recorded stock market history is of any guide. In fact, I believe we are about to make one (although not necessarily on Monday). Here's a couple of scenarios to look for on Monday:
Bull Trap: The market gaps down at the open, and stages a rally closing the gap and perhaps then some, then takes a nosedive closing at the lows of the day.
V Bottom: The market opens sharply lower and heads low triggering a trading halt ~1000 Dow points below, then reverses itself and closes at around Friday's close, give or take a few percentage points.
Of the two, the bull trap scenario is both more dangerous and likely to occur. A few tips for the Monday's trading session: Do not assume that a) the market will bottom out on Monday however low it might go, b) your orders will be executed as entered c) you will receive timely execution confirmations, d) your quote feed accurately reflects what is going in the exchanges. Do not use market orders. Do use hard stops, route them directly to NYSE and AMEX. Wish you all good luck, you will need it.
dis
"Bull Trap: The market opens sharply higher and stages a rally closing the gap and perhaps then some, then takes a nosedive closing at the lows of the day.
V Bottom: The market opens sharply lower and heads low triggering a trading halt ~1000 Dow points below, then reverses itself and closes at around Friday's close, give or take a few percentage points."
there is another worse possibility.we open flat or up and continue the bleed.pros would short a big gap up.the best thing for the longs in the market would be a gap down open that gets the shorts to cover and maybe get a rally started that could feed on itself.
1000 points down open i would go full margin long.
V Bottom: The market opens sharply lower and heads low triggering a trading halt ~1000 Dow points below, then reverses itself and closes at around Friday's close, give or take a few percentage points."
there is another worse possibility.we open flat or up and continue the bleed.pros would short a big gap up.the best thing for the longs in the market would be a gap down open that gets the shorts to cover and maybe get a rally started that could feed on itself.
1000 points down open i would go full margin long.
Sorry, but this is the first time in three years that I've felt the pressure is coming off the market. Having correctly called 10 of the last 2 bear markets, I'm looking--and hoping---for a gap down followed by a big rally.
Something tells me the Specialists in RD and AL, who must be incredibly long after the giagantic sell imbalances Fri, will not lose money on their positions.
Something tells me the Specialists in RD and AL, who must be incredibly long after the giagantic sell imbalances Fri, will not lose money on their positions.
I completely agree. I'm also long over the weekend.
I was wondering what would be your game plan if the market takes a big dive Monday before reversing? Would you just hold your longs, knowing that the market will reverse very soon? Would you add more at the lows?
Don't get me wrong, I'm in a similar situation. I'm just starting to think of how I'll react under the pressure. Although it's a good sign that I'm getting afraid as you said.
Thanks,
Tony
BTW, I think I read early this year that you live in the area? I think you were complaining about Cox when they started their own network? Anyway, if you're still in the area, I wonder if we could meet to talk trading? If not, that's cool too.
