Sunday Position Update and Thoughts

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October 9, 2011

rutd

Current positions are:
100% short via the inverse RUT and NDX funds
SQQQ, DRV, and some puts in GMCR (untweeted)

Everything is not perfect for a down move here. However, I think its going to move that way. I know looking at the charts I would take this trade all day, but of course it can go wrong just the same. If one continues to act according to their plan – and their plan is tested as being successful forward and backward – then taking losses correctly are a major key to success.

We’ll see if this is the right trade or not in the coming week. I am still anticipating a bottom sometime this month. The big thing I’m looking for is another pullback, but this will be the one to buy for a larger move higher.

If we go higher from here, I think the market will selloff in one day that recaptures about 2 days worth of trading action in dramatic fashion. This scenario would probably kick me out of positions setting up for a potential miss on the downside.

The other big scenario is a 2-3 day retest lower starting Monday. Imo this would be the low to buy and the scenario I’m playing for. If we get the selloff move, this will most likely set up a rally that at some point meets or gets close to the 200SMA.

Anything I said above is a guess. If the charts say differently at the time I will act according to them and not hang on the guess/bias I’ve posted above.


  • Bostonhorses

    gold and silver seem to be building a base that might take months to complete.  but long term chart patterns still look very strong. so i would guess that anything crazy that could happen would be to the upside still.

    good luck

  • http://www.stockrake.com StockRake

    Both SLV and GLD look vulnerable to me. Both dropping would coincide with my current trade and then set up for a nice move higher off the GLD 200d moving average. SLV doesn’t have that support but would anticipate a move in a similar area for SLV where GLD finds its support.

  • http://www.stockrake.com StockRake

    Staying in cash unless we collapse into the final 20 minutes and I don’t see that happening.