No, I'm not talking about Obama.
I'm having to post this just before the close. I'm off into the city to attend my girlfriend's boss' BBQ so it shall be short.
Needless to say, it has been a long time since we've had a tape like today. What started off as a low volume/volatility day turned into a broad sell off trend day.
Anyone who has a developed a good 'feel for the market' as of late needs to be quick to change their pattern recognition skills. What has worked over the past 3 months has the real potential of utterly failing as the bear market resumes, so one must be completely vigilant of this fact.
This past week my public ES system results have been significantly muted which is expected considering volatility had completely vanished - a major signal of a top. This week is turning out to be exactly the same, so exercising extra discipline is warranted.
Below is the month-to-date equity curve based on a 1-lot trading size which I expect to, at a minimum, maintain by exercising real caution when it comes to long entries.
2.- SPX FORECAST
My original forecast - Lines in Sandboxes - that we would hit 900 before 960 (on ES) seems to be unfolding at the moment. I, however, exited my shorts around the 920 area as a measure of precaution. Personally, I needed to be sure that the bears have regained control of the tape before shorting aggressively.
The current impulse move should end around ES 897. At some point I expect a bounce (approximately to the 930 area) at which time I will begin to re enter shorts more aggressively.
Sorry for the not-so-detailed posts. I promise to get back to my regular scheduled program shortly. Lots going on this summer.
3.- DISCLOSURE
As a matter of full disclosure, I will mention that I am completely flat in my trading account but heavily short from the beginning of June in my active RSP account (which is more long term). In it, I am invested in double inverse ETF's which I plan on holding for a longgg while and a single small gold stock.
