With those two charts I emphasised the striking similarities between the price pattern.
I did not post the entire chart from the comparison module, only the structure that currently has completed.
Below you will find the remaining price pattern from the comparison and if you look back to the post on Friday you can plainly see what the next major move should be for the S&P 500.
DOWN.....DOWN.......DOWN
Nothing is ever etched in stone in equity analysis and this is one of the major reasons I am so passionate about analyzing not only equities but commodities as well. There is always something new coming around the corner and your analysis is dynamic not static so you always have to be on your toes.
It is also important to remember that being right is nice, but making money is really what it is all about. If you follow your plan and execute it without a hitch then the $$$$$ will be sure to follow. This means being able to flip sides in an instant should the work dictate such action. This seemingly easy task of flipping sides I will tell you was the hardest thing for me to master and even now at times it can become a struggle, but I have a pretty good handle on it. It also means being able to take losses when they come and not let hope get the best of you. Losses are invariably going to come your way, and at times you may have a string of 5 or 6 of them, but if your plan is solid and you have put forth the necessary effort of study then these losses actually become an asset of sorts.
How did I get on this subject anyway?
I could write and entire book on the psychology of trading and the school of hard knocks, but that should be for another time.
The point of this post is to emphasise that we may be on the verge of some very nasty downside action and there will be some great volatility to capture both on the upside and the downside.
I realize that my current short term analysis of equities puts me in the huge minority of what people are expecting from the markets over the next 5-8 days, but being in this position actually makes me feel a little better. I always want to be in the minority camp if I can. To me, there is just simply way to much talk about the extremely strong seasonal time frame we are entering and while this may be true, there are some serious differences in market conditions from now compared to the last 9 or 10 Novembers.
In short, be careful and stay ready to make some serious coin on the volatility that should be on its way.
No comments:
Post a Comment