Friday, May 3, 2013

WOW! I think that sums it up

Many of you have been reading this blog may have noticed that my blogging frequency has increased over the past few weeks as I got short the market. As you can imagine I am down money since getting short the market, this is the time when most people pull away from posting. But my goal is to stay active and involved and show you that trading is not always rainbows and butterflies. It is times like these that the things I have been sharing over the past couple of weeks are so important. You need to trade small relative to your account. I have a decent short position in the market and my portfolios are set up to make some awesome returns if we finally turn lower. But something I would like to point out is that my account is 70% Cash. I learned a long time ago how important it is to live by the rules you preach.

Because of my discipline I am able to continue to hold my positions, I have time and capital on my side. I can't stress enough how important it is not to get to big.

Now onto the market analysis:

The /ES has broken through the 1,600 level with strength. The high put in this morning is 1,611.75 as I write this post. Obviously with all time highs, there are no levels of resistance to the upside. The market resilience is very impressive to say nonetheless. There is no fear in the market and with a breakout above 1,600 this market could have an extended move to 1,630 in the short term. Its scary when everyone wants to be long the market. Now obviously I am a bit biased with a overall short position. But take a look at the longer term chart and see what's happened the last decade when markets were breaking out to all time highs:

Is the 3rd time going to be different?
I don't consider myself a technician but, a google search for triple top yields results of a very rare and bearish chart pattern???? Anyone following this blog have any comment from a technicians perspective on this possible chart formation?

Where do we go from here?

Good Luck Trading!

In The Money Trades

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