Hi Ken, I'm looking for another up week for the broader market. In the last year there have only been 3 instances where the broader market has had 2 up weeks in a row, all of which have been just prior too, or during earnings. Currently, the Dow is leading the market and has a RSI of 57. The overall market is still trading technically. I would not be surprised to see the Dow add another 1000 to 1500 points before the Fed meeting, Nov 1 and 2. If I'm correct and the Dow's RSI goes into overbought conditions again, it might be another all in short for me. Last all short netted a 53% gain.
Why I faded Fridays close.. again
- Thread starter KCalhoun
- Start date
Just out of curiosity do you factor in where the move generated from related to the individual chart you're trading on how to use overbought conditions?
This is just a general question, not necessarily talking about your current trade. I've just noticed that overbought coming from a certain place on the chart can be extremely bearish and you're able to do a strategy where you short before overbought is finished. However, if overbought starts to generate at another place on the chart, it's actually an extremely bullish thing and not only do you generally not want to short it, you actually want to look long. Only once overbought stops and you get a sell signal, than is it safe to short and than you look for the overbought to be retraced back to means reversion.
You may be right but we closed at the highs on good volume because of dovish fed talk. That’s why I am not short nor was I long going into the weekend. If they are hawkish early before the open, that will cause the 2 and 10 year to rise.‘I hope you are right because you seem like a good guy. Just be careful and if you are wrong, minimize your losss.
Friday-Monday Momentum always a high probability trade. Not 100% but what is? I would never fade a Friday trend day, up or down. But anything can happen when the future is unknowable.
He thinks he's getting in at the bottom of an inverse. I say that is a dangerous play when we have some heavy earnings coming out next week. Big names! We no longer call them FAANG, me call them MAGMA!
(Meta, Apple, Google, Microsoft, Amazon)!
(Well, I made it up.)
Even worse Ken already got absolutely hammered holding inverses on two Monday's this month. If I take a trade that doesn't work twice, I don't jump back in until I have a good reason to.
Nah, remember, he always has an out. He also trades non-inverses on up days, to offset the inverse losses on the up days. It's magic!