Market Euphoria and the Caution of Shorting It - No Trends
Atualizado
So, just thought I would check in overall after I had several messages asking me what I was up to recently since I have not posted.
Just to note, all trends are basically in an uptrend of higher highs and higher lows. Some of the longer term trends haven't struck in some time. Heck we haven't had a Daily downtrend in months and are still operating off the Daily uptrend signal around 4300 last October.
Overall, I had gone short at just above 4900, that trade had gone up to around 2500 profit, and the market surged back up and I ultimately left that trade with a few hundred dollars. I have not tried shorting the market since, and as I don't tend to trade into market hysteria (normally to my detriment!) I've not tried jumping into a Long position at this point.
As mentioned in the video, there are lots of great logical reasons and sell signals that this market surge should subside and we should have a market correction and see a downward movement. However, this market is blown numerous sell signals out of the water and is not acting logical or operating inside any market indicators I'm aware of.
So my suggestion is one of extreme caution. I've already seen several on the website claim they went short for "easy money" at around 4700 because the market was going to be punched in the face and we'd see a major downturn. While I agree with their assessment in some regards, the trends are all in an uptrend and nothing has shown me that there can be a sustained downward movement. Prices are surging and volume is relatively low. So any attempt to short this market falls in line with the old phrase about not trying to catch a falling knife (or in this case... a thrown knife?).
So trade safely, and remember your risk management plan. I'll check in after a bit and hopefully the market in terms of the S&P begins to trade in a more consistent pattern.
Just to note, all trends are basically in an uptrend of higher highs and higher lows. Some of the longer term trends haven't struck in some time. Heck we haven't had a Daily downtrend in months and are still operating off the Daily uptrend signal around 4300 last October.
Overall, I had gone short at just above 4900, that trade had gone up to around 2500 profit, and the market surged back up and I ultimately left that trade with a few hundred dollars. I have not tried shorting the market since, and as I don't tend to trade into market hysteria (normally to my detriment!) I've not tried jumping into a Long position at this point.
As mentioned in the video, there are lots of great logical reasons and sell signals that this market surge should subside and we should have a market correction and see a downward movement. However, this market is blown numerous sell signals out of the water and is not acting logical or operating inside any market indicators I'm aware of.
So my suggestion is one of extreme caution. I've already seen several on the website claim they went short for "easy money" at around 4700 because the market was going to be punched in the face and we'd see a major downturn. While I agree with their assessment in some regards, the trends are all in an uptrend and nothing has shown me that there can be a sustained downward movement. Prices are surging and volume is relatively low. So any attempt to short this market falls in line with the old phrase about not trying to catch a falling knife (or in this case... a thrown knife?).
So trade safely, and remember your risk management plan. I'll check in after a bit and hopefully the market in terms of the S&P begins to trade in a more consistent pattern.
Nota
In case anyone was curious, we finally got an expanding ISM Manufacturing PMI. We did however, get a higher than expected reading on manufacturing prices. These numbers are for March, which would suggest that at least PPI is going to show an uptick in inflationary prices. I doubt the CPI or PCE hasn't felt that at all, but we won't know until those numbers come in.
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