Tuesday, January 17, 2012

The selling has begun

 The retail investor that finds himself buying a stock will do so when sentiment in the market is extremely optimistic. It is at this time that the media outlets selectively disclose positive new releases to make the ambience of the marketplace seem euphoric. If and when negative news is outsourced during this time, investors overlook its importance because of a larger headline event that becomes the central theme for the marketplace. In order to exchange shares to the public a powerful media influence is needed to convince enough buyers to participate in the marketplace. This displacement of shares allow for large institutions to quitely unload their core positions to the hands of the public especially when the market is nearing a significant top. Almost always are the institutions in the know and cannot liquidate their current positions all at once, so this effort is done by scaling out of large positions in portions. Each bundle that goes to the market for sale is bought and suckered in by the retailer who thinks he has a bargain. When sentiment in the market is at extremely bullish levels, the public is overly eager to buy stocks, and quite the opposite, afraid to buy stocks that are so beaten down. TRADERS SHOULD EMBRACE FEAR in an uptrending market, but be short in a downtrend.

The S&P Mini

The S&P hourly chart

The S&P Daily Chart 
The U.S. Dollar Index


  1. First of all, thanks for the time on the analysis. Been here for months, just haven't commented yet.

    I'm curious though, if I go short here, do i really buy at the first break of the support trendline and put my stop above the last break high? I'd be risking like 20 points. I know you cannot give specific advice. I'm just thinking game plan stuff, ya know.

    Also, anything to make of the bear cross on the daily Macd now in progress?

  2. Hey man, I'll mention something in tonight's post about the MACD. Have you thought about adding yourself to the member board?