Thursday, July 02, 2009

Market barely clinges on...more downside to come?

It wasn't comfortable yesterday. The market rebounded ferociously against my short position and while stop loss was not hit, sometimes you are tempted to just cover the position and stand aside. With only 1 short position, i can afford to take the risk and hang on to the position. This is not blind faith and certainly not based on hope analysis. This is risk management couple with T.A. What i saw in that rebound on Wednesday is the light volume. I just can't believe the rebound can sustain on a very obvious light volume. Resistance still holds while we rebounded with light volume. What happens there and why the light volume, this i won't know. Livermore couldn't have said it better, the why usually will be answered after the move has started.

It was satisfying to see market tanks in the afternoon. However it all points to nothing if we don't close lower by Friday. Because from where the technicals are showing, naturally it should falls lower. If we trade higher on Friday - TREACHEROUS! Currently Dow is 3 digits down...sort of confirmed we are going to go down tomorrow.
Pls dun get me wrong, I am not saying this is the start of another bear market. I just thought the market is showing that it is going lower and i just trade accordingly. As a market participant, we are like a boxer, we must know when to long, when to short.

Below shows the only short position i have in this market. I need the head and shoulder formation to form...once formed, i will swing into full shorts. Otherwise i feel the current volume is still not a strong indication. Bear rebounds are quick and can be high....shaking shortists out of position. It will be nice if tomorrow we wake up to a -280 from Dow... c'mon Dow u can do it!

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