Downtrend Confirmed

Last Tuesday we mentioned the potential downtrend being established and with this mornings gap down it has gone into downtrend terriotory.  Below are some charts showing the move.  As far as our sidebar portfolio goes we usually wait a day or two after a trend is established to rotate fully.  Keep in mind that this portfolio has only had 6 days with trades this entire year. ( Jan 9th and 29th, Feb 13th, Mar 16th, June 18th, July 16th) (Long/Short SPY up 37% so far YTD but taking a beating today)

8-17-09SPY

Longer term chart on full post …..

8-17-09SPY-2

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16 Responses to “Downtrend Confirmed”

  1. Keep in mind tomorrow the Housing Starts and Permits numbers come out. One of the Bulls favorites.

  2. The close today is a text book swing trader’s decision point. These, few in number decision points, make or break the returns for the year.

    Do you take your winnings off the table now?

    Or, do you hope for a bounce to then take your winnings?

    Unfortunately, each option is correct about 50% of the time. So flip a coin.

    • Definitely true R… its a coin flip near the beginnings of new trends. Usually like to give it a day or two once the trend is confirmed to see if a bounce back happens.

      Tomorrow might be a good day to get into the short side if they have a dead cat bounce with the housing data. But of course thats just me thinking out loud… not advice.

  3. What industries does everyone think will be hit hardest once the correction starts?

    • The financials are the leaders… once they start melting down the entire market will follow.

      If this turns into another deflationary wave down all the commodity plays will get hit hard such as oil companies and miners.

  4. All the double shorts have just been destroyed during this rally. Me thinks lots of upside if things get hairy.

  5. Alright there’s the 100 spot i was looking for on the SPY

  6. This market just refuses to reverse considerably

  7. The market takes a long time to turn over to a new move… like a big cruise ship changing course.

    It is definitely primed for the rollover… just a matter of time.

  8. I think all you have to do is follow AIG… if that stock is up the market is up.

  9. Well so much for that… some of my stops got hit on SPY early this morning. The Bears were too weak again and the squeeze was on. I think for any downtrend to really gain traction we would need some big turning point in the news. Cost the NHF sidebar portfolio a couple % points for what appears to be a little head fake.

  10. Still very reluctant to go long here. May keep shorts on depending on todays action.

  11. Nice reversal so far today.

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