Capitulation / Stock Rake – Trading Stocks Online

Capitulation

November 17, 2008

I’ve sold any long I’ve owned throughout this turmoil. I’ve capitulated. I’ve taken my losses and picked up my ass and did the right thing. I went smallish to the short side. I’m looking for a low to be put in this week. The monthly charts are very oversold, BUT this month has to end down for them to close the month out oversold. This is HIGHLY HIGHLY HIGHLY HIGHLY likely to setup a major bottom when this month is over or the next one (December).

I did manage to make some cash on the long side today using TNA. I didn’t go into TZA which is the bearish 3x RUT ETF.

I hate that the volatility indexes are ratcheting upwards. VIX seems poised to breakout – if you can believe this.

BTW COMPX to hit that lower line in the chart above is 182 pts lower. The breakdown today suggest we are going there.

MACD turned down today on the COMPX daily chart, SPX, and RUT.

Update: The only thing I can see that matches the current market in the charts is the end of the 1974 bear market.

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http://www.stockrake.com StockRake

Next time around I'll follow my own programmed shit and cleanup instead of using trading bias .
http://www.zentrader.ca jeff

Looks like you and me both decided enough was enough today. Very frustrating…
http://www.stockrake.com StockRake

Lets not forget it though. There will be an opportunity soon.

What I want to see is if these divergences are still there after the swoon downwards.
http://www.stockrake.com/weekly-divergence-in-t…

If the divergences are gone, then I want to see severe oversold conditions on the daily charts. The monthly chart is showing an oversold level only seen a few times in its history.
http://www.stockrake.com StockRake

also the action in both UYG and C today were downright scary.
http://money-eater.blogspot.com/ Sia

1975 bottomed with a lower high. http://moneycentral.msn.com/investor/charts/cha…

We look like 1974 before the market dropped another 40% or so.

I looked at previous crashes a little while ago. http://money-eater.blogspot.com/2008/10/crashes…
http://www.stockrake.com StockRake

This is only the 4th time going back to 73 that the spx has been this oversold on the monthly chart.

1974 is the only period that I have that matches this. I don't have data beyond 74 though.
From high to low in 1974 was 47% decline we're at 45% right now on the SPX.

This month should end badly particularly this week then meander next digesting. Then hopefully a very nice bounce in the beginning of December. If no bounce happens in December, then according the 1974 plan, December will meander around the lows and then a bounce in January. Then a back to back monthly retest which would setup an April rally. This rally will almost likely be the beginning of a new multi year bull market. However, don't expect 1999-2000 running.

Expect, 1975-1987 numbers.

We had a lost decade of investing, there is no way in hell the markets have another 10 years of nothing. The next 10 years will most likely be an incredible 10 years of trending markets.
http://www.stockrake.com StockRake

Moreover we are much closer to the end.

Draw a fibo on a monthly chart of the SPX. The exact low of the bottom penetrated a 100% retracement level before recovering and that being the bottom.

We are currently 7% from the 100% retracement level on the monthly.

Now the penetration of the 100% retracement back in 74 dropped an additional 15% below the 100% retracement. So to match that drop from today's close would be a 22% drop. I'm not saying it gets there, I'm just saying that's what happened before.
Jack

I'm going long today. Been going with SKF for the past 2 days (but just in and out daily for quick small gains so don't think I made a fortune)….The market cannot just fall so far in straight line. We are overdue for a rally…then down to a bottom …SP 650 ; DOW 6500 ??? Probably so.
http://www.stockrake.com StockRake

It probably seems like I'm getting short at the exact wrong time, but we made new lows and took out some major stuff…I'll be long when the market says so.

What happened over the last two days confirmed that the long side is porked (not like the last 35% slide didn't already), but the last two days specifically said the fear is coming. Fear hasn't arrived apparently.

Market hasn't bottomed/reversed on Wednesday either lately. Today and tomorrow be careful. Then maybe if those weekly divergences hold, long time for a short while.
Jack

I'm still long. Put my money up yesterday and escaped (just barely) with the slimest of gains on SSO in the final minutes of the trading day. Today I'm going in again expecting the bulls to charge. I'm watching SSO, MVV, UWM and MOO and will try to catch a good entry point. Longterm I'm still bearish and I'm just trying to make a little money on what should be a bounce rally
Jack

I'm still long. Put my money up yesterday and escaped (just barely) with the slimest of gains on SSO in the final minutes of the trading day. Today I'm going in again expecting the bulls to charge. I'm watching SSO, MVV, UWM and MOO and will try to catch a good entry point. Longterm I'm still bearish and I'm just trying to make a little money on what should be a bounce rally

http://www.stockrake.com

Capitulation

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