OK, so Tuesday was a nice way to return from Presidents Day (should we even celebrate that holidays given the state of our current, well, ah, current President "dilemma"?
Market had a HUGE gap up, over 1% all around and yet once again the selling intensified and all around we finished RED, with volume to the downside CRUSHING volume to the upside by a HUGE margin. Folks, this market is a traders dream and you really need to be taking advantage of it by trading it and fading it. We couldn't get a better setup then gapping up on NO NEWS in a big way! We shorted BIDU for over $11. We shorted FNM for $1. We shorted the hell out of the open and we ROCKED it!
SO, where does that leave us for Wednesday? Well, I think we get a really nice move and trend day Wednesday. It looks like we'll gap down and so hopefully we get a nice selloff and then can launch a super rally that may have some legs here. It might be wishful thinking however. If we can't reverse a nice gap down and we close near our lows then I think the market may head right back to the recent lows before trying to form a double bottom.
Brokers are still cracking and I think its important to heed the fact that GS in particular could not remotely hold its gap up, even after posting an impressive gain on Friday which seemed that it might be a reversal for a move higher. I think GS sees $120s or lower at some pt this year. I think anyone calling for a real bottom, not a trading bottom, is just a snake oil salesman. There is no shot we have anywhere near a bottom, its going to get MUCH MUCH worse in the long run. DOW will be under 10,000 in the next 12 - 18 months with my guess it happens THIS YEAR! That would mark one of the worst years in market history.
Watch BIDU for further downside, this thing looks headed for sub-$200 near term. I'd also watch the $RUT.X. I think it'll be below $600 within 90 days. Yes, I am bearish, but I do see us getting a nice trading rally here shortly as well. That will then set up a VERY easy shorting opp. I hope I'm right so we can catch it both ways.
In the meantime, keep shorting FNM on any non-news related gap up, its pretty easy money at this point it appears if you play that. That stock is headed for sub-$10 this year. There's just no reason to own the financials here, folks, don't get fooled into the notion that the bottom is in. It ain't, even if we do get a relief rally here this week.
See ya tomorrow night, make sure you sign up for a 2 week free trial @ www.trendfund.com
RULE!
Michael "Waxie" Parness
No comments:
Post a Comment