A-B-Cpatternisaverycommoncorrectivepatterninatrend(eitherupordown).ThesizeofAandCcanbesimilarorCusuallyisgreaterthanA.Bisthecountermovementinthiscorrectivepattern(usuallydrawin-experiencedtradersjumpin).
WhenW%Mgetsintooversoldzone,youdon'twanttobeaseller.WhenW%Mgetsintooverboughtzone,youdon'twanttochasethemarket(mostofcasesinatrendingmarket).AndbigrallyusuallystartswhenMACDcrossoverzero(whent...[
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IfwecompareFXIand$RUTtoday,Iwouldbuy$RUTinsteadofFXI.Evenwithtoday'sbigselloffafterafewverybadnewscameoutthismorning.S&P1900areaand$RUT1100area,marketshouldfindsomekeysupport.
Therewillstillbeafewmoredowndaysevenbigones.Ifthathappens,thatiswhereyoucansellprotectionsandstarttousesomecashthatwereraised.
VIXiscloseto17today.Whenitgetstonear20,Iwouldstarttounloadprotectionandusecash.
T...[
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Marketisokatthemoment.Uptrendisstillverymuchintact.However,somenegativedivergingshowsupinS&PandQQQ.Whichtellsusitistimetobecautious.Addsomeprotectionandraisesomecash.
Bythatsaid,smallcapseemshanginginsideoversoldzone.Ithinkitmightperformbetterincomingweeks.Sothereisreallynoreasontobeverybearishnorverybullish.Andabsolutelynoreasontosellallbecauseoffearof20%correction.
Refertomypreviousa...[
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Bottomingisaprocess.Wewillusuallyseecommonpatterns.Doublebottom,orcupwithhandlearejusttwoexamples.Manytime,ifyouarepatientenough,thereisnoneedtoguessthebottom.Andyouwouldknowwhentobuythem.Currently,Iamsitting20%onISIS,11%onTWTR,and10%onFB.[
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Emergingmarketperformedmuchbetterin2014thanUSsmallcapstocks.Earlierthisyr,nobodylikesemergingmarket.Mexico,Brazil,andotherwerealltanked.Smallcapmadenewhighandeverybodypiledin.Howeversince,thingschangedalot.Smallcapbecomesworstperformerinfirsthalfof2014.
Atthispoint,EEMreachesresistance,Russellreachessupport.AndpeoplefearaboutRussellrightnow.60%+stocksinRussellareinbearmarket.So...wecouldseecha...[
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Marketretreatedinlast23timesafterFED'smeetings.Itseemsthatitwillbenodifferencethistime.ButasImentionedmanytimes,using2X,3XinverseETFstoshortthemarketisfool'sgame.Butbetterapproachisstilltoholdcorepositionandprotect/hedge.
Atthismoment,S&Pputsareprettycheap.VIXislow.Itmakeslotsofsensetoaddprotection.
Momentumstocksarestillintrouble.Itisnotlikelytochangeanytimesoonalthoughsomeshorttermbo...[
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BothAAPL/FBreportedgoodearningafterhr.IshowedAAPL'schartinmypreviouspost(whichIthinkithaschancetogetabove$600inthefuturesincevaluationisjusttoocheap.)
FBistheoneIthinkisovervalued.Butthisearningreportissolid.ThequestionisthatiftheyalreadysawtheirbestQ.Priceactionwilltellprettysoon.GivingthisER,TWTRislikelytomelthigherintoitsearning(butlikelyadisappointingQ).
ThenitcomestoQQQ.IsitformingH/S...[
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Everytime,whentherewascrisisoversea,therewasabigrunupinUS$whenpeopleseeksafetynet.However,since2013,itstoppedhappening.EspeciallywhenUSdecidetofreezesomeRussia'srichpeoplesannount,theweaknessinUS$becomeobvious.
US$iscrruentlyatcriticalsupport.Losingitcouldbeabigdeal.ItmightmeansthatUS'sinfluenceofworldstartstodisappear(obviouslyUSonlongercanhavefullcontrolofRussianorChina).Toproventthatfromhap...[
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Afteraveryshort3daysreboundsincemylastarticle,"SellinMay"themecomeinearly.Nasdaqlost4000.WithRusselandNasdaqlostnearly5%YTD(worstperformingindices).
Inmyfirstarticleof2014,Imentionedthatnasdaq,smallcaps,Japanaremostownedindices.Itturnsoutthattheseareworstperformersof2014.Matchingthetheorythatcrowdedtradesareworsttrades.
IalsomentionedthatFB/TWTR/NFLX/AMZN/TSLA/SCTY/CSIQetc.arelar...[
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