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S&P June 9th long term & follow up June 13




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alleyb: I agree with your analysis that in this environment we may see a 50 pointer day. The problem is that because they are so rare they are almost impossible to spot and impossible to trade.

Say you shorted the open and the market drops through the morning and at lunchtime you are still holding the short and it's now worth 30 points. What do you do at this point? Are you going to close it out and say "thank you very much" or are you going to hold out for another 20 points at the risk that the market might retrace a lot of your gain?
once u have trade location why would u take the profit? for in achieving trade location where the day trade turns into a swing trade you will find 2 things occur. 1 u cannot be touched ie there is no emotion in that if they squeeze against you then yes it is annoying to give something back but they cannot hurt you or take you negative. and so that anxiousness is minimal & 2 u will find that if you take the money and run that then the next trade you invariably do is to try to fade the market and give back everything you earnt in the first place.

Re 50 pointer I have in fact been calling for this ever since we broke back down thru 1319 in the June together with the overall bearish view. (pls review previous posts) The view is from the internals in the MP nothing else. Not only have we seen THE top but in fact in typical MP terms having had a 3+ year bull market we have and will revert to the mean. The way has been clear for some time and despite the fact that finally I see some selling in the profile (boy has it taken them a long time to smell the coffee) there are still far too many who cling to the notion that this is a healthy correction and keep buying. Note this am squeeze for an example. Until the last bull throws in the towel we cannot hope to get to MP stage 2 (stopping) but will continue in stage 1 (move vertically)

cc my comments today in the Trading Strategies re friday option expiry