This doesn’t happen all that much, but when you have three straight days of doji candles on the S&P, it typically signifies a reversal in sentiment. Not always – but most of the time. Outside of the two new short positions I established this morning, I didn’t short anything else. I’m about 30% vested right now (counting my position in gold (GLD), and will look to perhaps add some more positions on Monday, if the market shows any weakness.
On another note, I went through over thousand charts this morning and afternoon, looking for ideal setups and I found plenty of them. I’ve added about another 70 stocks to my short watch-list, which more than doubled what it was this morning. There are some OUTSTANDING short setups and I’ll be posting perhaps a top ten favorite setups or something to get your bearish juices flowing for the open come Monday. I already posted a chart on YAHOO (YHOO) that I thought looked REALLY good.
One last thing – I was utterly sickened by the treacherous officiating in the U.S. vs. Slovenia match. The U.S. won that game outright and deserved the win. I only pray that guy never ref’s another soccer match again.
And one final last thing ….lot of talk about the obvious head & shoulders pattern forming on the S&P, and whether it will be the prelude to a major sell-off. Frankly, I don’t know, nor can anyone else know. A lot of people are saying that because it is so obvious and so many folks are talking about it, that it is bound to not work and thus trap a whole bunch of bears in to short position that they should have never gotten into. That could be true. I don’t know, but trying to outsmart the market rather than trading off of what it gives you is oh-so foolish. I believe that the market will go down here, and likely off of the head and shoulders currently being formed. If it doesn’t, then I cover my positions and move on to the next trade. Yes, I take a loss, but that my friend is part of trading.