Have the falls finished?
- Thread starter TTT
- Start date
Nobody knows 100% if price will rise, and even if 99% of members responded and said "Yes", that shouldn't be taken as a 99% probability that price will rise. The question is how to take advantage of a price rise? Secondary to that is how to manage the risk.
I had thought of putting a buy order at the high of 21/11, using a hikkake pattern - though arguably this only formed due to the Thanksgiving holiday wind-down. That's also 383pts above where we are now so that would indicate much buying energy but trade off a lot of potential profit in exchange for confirmation.
Maybe a more efficient way forward would be to put a buy in above the 23/11 high: Friday printed as an inverted hammer so a breach of the high would suggest buying energy. But Friday was only a partial session and patterns from low volumes shouldn't be trusted as much as usual.
Maybe there's a entry order level visible on the intra-day charts.
What I'm not considering is going long immediately, I want to see some confirmation, its a question of how much I'm prepared to pay for it.
I had thought of putting a buy order at the high of 21/11, using a hikkake pattern - though arguably this only formed due to the Thanksgiving holiday wind-down. That's also 383pts above where we are now so that would indicate much buying energy but trade off a lot of potential profit in exchange for confirmation.
Maybe a more efficient way forward would be to put a buy in above the 23/11 high: Friday printed as an inverted hammer so a breach of the high would suggest buying energy. But Friday was only a partial session and patterns from low volumes shouldn't be trusted as much as usual.
Maybe there's a entry order level visible on the intra-day charts.
What I'm not considering is going long immediately, I want to see some confirmation, its a question of how much I'm prepared to pay for it.
Instead of just focusing on the indicies, look at the individual issues as well. The main difference between February lows and now is that the damage was largely contained in FANG's, for one, and other sectors as well. Parabolic expansions lead to disorderly declines because participants are poorly positioned. That is something I see in many of these individual issues that are so completely overextended.
Just take AMZN as one example. Parabolic blow off top with a mature company that doubles in under one year. Momo traders bidding it higher day after day, week after week. It finally puts in a top and you have the weekly 200 MA $550 lower. Broken parabola's are very dangerous and we have an entire market full of them.
(Bolding is mine.)
I think the issue with waiting for confirmation has to do with what you need to see for confirmation of a continuation of a trend and how long it takes you to see it. I finally saw it in decreased volatility and smoother movement in beginning of September. This time in Oct it did not pan out like it did in February.
In Feb the market recovered in a month. In Oct, the market never recovered, it just kept (and still is) crashing down lower. Too many falderal variables now in place to pick a true direction.
Are you still long NQ?
No sir. I exited my position about 3 weeks ago, and glad I did. I came out scathed, but not brutally so.
Well that's good. Hard to take a bad loss, but better than a catastrophic loss. I got clipped a bit first week of October and then got the hell out.