Suppose you are a longer term trader, and you are long a bunch of staff since summer. You sit thru Sept and October, because it's a consolidation and you are a trend-follower. Trend is up. Then November happens and o-shit - all kinds of support is taken out. Being a leveled-headed individual with 2 bear-markets in recent past, you say " the music has stopped and there is only one chair left. Next rally I will unload, go to cash, maybe go short".
Well, this is it
I Have a little short, still have a bunch of longs.
As for cash, will have to see what will be stopped out by the end of day.
Sold SIL and CG yesterday.
The difficulty of this moment in this context is: even if I stop out, I must be willing to buy it right back.
Welcome to Whipsaw Valley, USA
I remember all too well the whipsaw we had in fall of 2011 and little in end of May of this year. I always had problems during these times. Get scared and sell at lows is the worst. I not only lose capital, i lose confidence and both takes time to rebuild. Having said that, I have a clear plan:
1. SPX moves over 1415-1425 and stays there. Market goes higher with 5ema(weekly) as support, and takes all my positions higher. (30% chance)
2. SPX moves under 1390-1400 and stays there. Market makes a double bottom, higher low is better. Then it rallies. I like to see this the most, because it will setup a doule bottom for T-centerpost with next top months away. I have been watching this since last month in this post http://ibergamot.blogspot.com/2012/10/possible-t-just-need-bottom.html (50% chance)
In a process I will be stopped out of almost everything. Then I will have to buy it all back.
3. The reason I stop out in #2 is this: if market fails to bottom - there is no support. Summer lows are not going to hold and this can turn into a big bear market. (20%chance) . Nobody cares, QE money stuck somewhere or may be there is no QE. Taxes go up, although I don't think it matters. Huge shakedown in army, CIA and government are going on right now. And they are not done. Something is up, I can smell it.
Interesting astrology piece from Karen Starich : http://www.zentrader.ca/blog/?p=16208#more-16208
There are significant planetary placements on November 28th that will mirror and bring a warning for events that will begin to unfold near December 22nd concerning the United States, Europe and the destiny for EU nations. The turning point for Europe could be as critical as the agreements at Yalta between Roosevelt, Stalin, and Churchill. It took four decades and the Malta agreements that took place in 1989 between Gorbachev and Bush to reverse many of the decisions made at the Yalta Conference in 1945.
The parallel to 1989 and 2012 is being mirrored in a very rare planetary alignment between Saturn, Pluto, and Jupiter. The power of this configuration can bring about a ‘shape shift’ where suddenly our way of life can be altered in a good way as it was for Europe in 1989, or in an evil way as it was in Tiananmen Square also in 1989.Thanks, Karen