Could it be that markets have been impatient? I think so. After watching yesterday's price action, I think the market gets the message now. Or do they? I need to see capitulation before I see a rally. But we're getting close. I've been thinking that the VIX needs to get to 40 or 50, and THAT would be my capitulation. So if that happened...what...we would get to 3000? 2900? I mean, it could happen in the coming weeks. Or maybe we just follow the downward trend line slowly for the rest of the year and no Santa Clause Rally?
Remember the scene in the movie "The Perfect Storm" with George Clooney, where the sun starts poking in through the clouds of the hurricane, giving the fisherman a sign of hope? And then the dark storm clouds covered the sun, destroying the hopes briefly had. That's what happened yesterday.
Plan for the day: I'll watch the market throughout the day to determine if I should continue to add to my short positions. The market may need a couple more days to digest yesterday. I really don't think anyone is going to want to hold anything over the weekend so if the selling continues today and tomorrow, that would not be good for the week to come. If we continue to go higher, 3970ish, 4010ish will be the area for me to watch closely. Either way, stay disciplined, be patient, trade the market in front of you. Happy Trading!
Remember the scene in the movie "The Perfect Storm" with George Clooney, where the sun starts poking in through the clouds of the hurricane, giving the fisherman a sign of hope? And then the dark storm clouds covered the sun, destroying the hopes briefly had. That's what happened yesterday.
Plan for the day: I'll watch the market throughout the day to determine if I should continue to add to my short positions. The market may need a couple more days to digest yesterday. I really don't think anyone is going to want to hold anything over the weekend so if the selling continues today and tomorrow, that would not be good for the week to come. If we continue to go higher, 3970ish, 4010ish will be the area for me to watch closely. Either way, stay disciplined, be patient, trade the market in front of you. Happy Trading!