Good morning shorts. No , that burning smell
- Thread starter stock777
- Start date
We've had a 2-day move slightly (<2%) above the highs of the last few months' trading range. So far that just fits the trading range pattern - testing the lows, then testing the highs, not breaking decisively either way until people get frustrated with high and low ticking the market.
Also, yesterday and today I noticed several of my stocks spiking up unusually hard, that is consistent with a bullish sentiment excess, at least in the short-term.
To confirm a new bull run, we need to see a proper breakout - more than 2-3 days, more than 2-3%. If it's instead a false breakout and we are staying in a trading range, then we should see a wide-range day to the downside fairly soon, like in the next week or so. If this happens then I would watch out below because there's a good chance we retest the bottom of the recent range, which is in the 1010-1040 area. That's very close to the key level of 1000, and you just know there will be lots of stop-loss panic selling if 1000 gets breached.
So IMO it's a good time to be hedged, have maybe a few December puts on small size, and wait to see what happens in the next week or two.
Also, yesterday and today I noticed several of my stocks spiking up unusually hard, that is consistent with a bullish sentiment excess, at least in the short-term.
To confirm a new bull run, we need to see a proper breakout - more than 2-3 days, more than 2-3%. If it's instead a false breakout and we are staying in a trading range, then we should see a wide-range day to the downside fairly soon, like in the next week or so. If this happens then I would watch out below because there's a good chance we retest the bottom of the recent range, which is in the 1010-1040 area. That's very close to the key level of 1000, and you just know there will be lots of stop-loss panic selling if 1000 gets breached.
So IMO it's a good time to be hedged, have maybe a few December puts on small size, and wait to see what happens in the next week or two.
