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Long or short?

Posted by Satuki On June - 28 - 2010

The general market has been stuck in a range for a while. A short term trend following system will fail miserably in a situation like this.  Oscillators, pivots , support and resistance work better here.

 

The overall market sentiment is perhaps still slightly bearish mainly due to the problems in Europe. So we can pay attention to how EURO is doing.  EURO has been rebounding from the bottom nicely during the past 3 weeks.  If it continues, it will help the stock market move up too. Or it will at least ease the downward pressure on the stock market.

 

The stock market is approaching a key support area.  As we can see from the chart below, support A and B were both valid.  If you had gone long on these key points, you would have profited nicely. What about this time?   Would you want to go long from here again?

 

 

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  • Dupont

    I would be bullish, not *very* bullish but bullish (until an european country defaults, lol).
    I don't think that we will have incredible results from the leading companies for the next years, mostly because the various “austerity” measure will strongly reduce the amount of money that governement will put at use to enhance consumption.

    Nevertheless, i think that companies that are not indebted and that are selling *really needed* products would be the best investnement for the next 1 – 2 years.
    Well implented companies selling basic food would be the best, because the human population is still growing and as long as they provide food in strong-natality-countries, they are going to make profits.

    Those companies are usually considered the less risky, i am only saying to turn to safety in uncertain times.

  • http://www.momdaytrader.com/blog/ Satuki (Trader Mom)

    I am with you on this one. In other words, I will be looking mainly for trades on the long side. Of course, as opportunistic as I am, if there are good short candidates, I will be after them too.

  • Dan de Man

    Today was the day to cover shorts so you can sleep well on the long weekend. I would imagine the 200 day is the target to shoot for longs and reload on shorts.

  • calugula123

    The Euro had monster moves up while the DOW fell 4.5% this week – you don’t know what you are talking about.

  • http://www.momdaytrader.com/blog/ Satuki (Trader Mom)

    I really despise comments like that. You isolated one part of a very big picture and tried to use it to extrapolate the whole thing.

    Now, open your eyes and the weekly charts of SP500 and EURUSD from 2002 to now and tell me if they track each other or not. They do most of the time right?

    BTW, I just caught a 600 pip move in EURUSD. Do you have anything to show us? It can NOT be self claimed 35% or whatever number you throw at us. Show us real time like I do.

    Next time. please do more research and come here with quality comments. Most of my readers are more sophisticated than you think.

  • calugula123

    The Euro had monster moves up while the DOW fell 4.5% this week – you don't know what you are talking about.

  • http://www.momdaytrader.com/blog/ Satuki (Trader Mom)

    I really despise comments like yours. You isolated one part of a very big picture and tried to use it to extrapolate the whole picture.

    Now, open your eyes and the weekly charts of SP500 and EURUSD from 2002 to now and tell me if they track each other or not. They do most of the time right?

    BTW, I just caught a 600 pip move in EURUSD. Do you have anything to show us? It can NOT be self claimed 35% or whatever number you throw at us. Show us real time like I do.

    Next time. please do more research and come here with quality comments. Most of my readers are very sophisticated

  • http://www.momdaytrader.com/blog/ Satuki (Trader Mom)

    The stock market indeed broke down. But If you knew how to read charts, you would not say “the market went straight down 1300 points”.

    Now, open the 60 min Dow chart, you can see that a standard rectangular trading range started on 5/14 and ended on 6/30, when the market effectively broke down. How long did it last? It was almost 7 weeks, right? Now let me ask you this. What part of “a few weeks” do you NOT understand? Do not answer it. That is just a rhetorical question.

    One thing I am sure is that you are absolutely not a technician. So stick with your FA. And we would appreciate some quality comments on FA

  • http://www.momdaytrader.com/blog/ Satuki (Trader Mom)

    The stock market indeed broke down. But If you knew how to read charts, you would not say “the market went straight down 1300 points”.

    Now, open the 60 min Dow chart, you can see that a standard rectangular trading range started on 5/14 and ended on 6/30, when the market effectively broke down. How long did it last? It was almost 7 weeks, right? Now let me ask you this. What part of “a few weeks” do you NOT understand? Do not answer it. That is just a rhetorical question.

    One thing I am sure is that you are absolutely not a technician. So stick with your FA. And we would appreciate some quality comments on FA

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