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Right Or Wrong? – November 21, 2011
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[B]“This is not an easy market to trade or invest. In the stock market, I don’t want to pick battles that are not easy to win and cause myself unnecessary aggravation. Life is too short. Remaining open-minded, nimble and flexible is as important as ever. Everything could change super-fast and a couple of days could make a huge difference in terms of market setups.”[/B] Ivan Hoff
There will be only 3 ½ days of trading this week as the exchanges will be closed next Thursday and Friday afternoon. Such circumstances make every scenario possible. A low-volume bounce would set up good shorting opportunities, but it will also be easy for HFTs to push the market down below critical support levels to precipitate panicky selling at obvious long stop thresholds.
As usual, we will only trade when the probabilities from the robot settings tell us it is safe and reasonable to do so. I have a strong personal bearish bias and I am impatient to go short, but being right or wrong is not the issue. Only waiting for the green light from the robots can reduce the risk of being wrong and increase our odds of success.
Today’s multi-pivots chart of IWM shows that the bulk of the gains on the short side could most likely happen after a decisive breakdown below the 50-day moving average (70.20). But the low-volume shortened week starting above a very strong support cluster favors a test and bounce at the 50 dma and we may need to wait another week in cash before a true high probability edge is confirmed.
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GDX could not be in a more neutral multi-pivot setup. There is perfect symmetry between the strengths of the support and resistance clusters.
Billy
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