Cash Is A Position!

I’m reading the blog comments tonight and there’s much much confusion and uncertainty in the force. Same situation on some of my favorite blogs – nobody has a clue of what’s ahead – with the single exception perhaps of T.K. who posted a very valuable fib chart.

I myself feel a bit uneasy about the current main trend but am confident that we shall arrive at a conclusion fairly soon. Which brings me back to a simple concept I feel I need to drill into your tiny little skulls just once more. Repeat after me:

CASH IS A POSITION!

Got it? Good! I saw a bunch of messages this afternoon as well as tonight indicating that some people took it up their rectums during today’s tape. For crying out loud – didn’t I implore you guys to sit this one out and to only throw money into the mix you are comfortable losing? But nooooo – just like crack addicts you can’t just stay away – just one more trade – just one more!! Didn’t I list several reasons as to why this week is toxic? Do I have to repeat myself again?

Anyway, for the mentally challenged among you rats – here’s a summary of what I said on Sunday and again repeated today: This is hell week, and there’s no accounting to where the tape will swing. Yes, it’s a regular fur ball and if you must play then use your petty cash and also make sure to sell major rips or to buy deep dips. Anywhere in between you will most likely get shredded by this guy:

The art of trading is to know when not to trade. Believe me – you will know the second you place a good trade. We don’t trade when we lose our bearings and at the closing bell this afternoon we just introduced another variable to the mix. At this point in time it is impossible to know in which Primary wave we are right now. So, why not wait until we do? There are many signals that point to the downside but the upside is not out of the question either. Sure, it’s possible to make a guess right here and maybe look like genius a few days from now – but you might as well go to Vegas and put your money on black.

I suggest we wait out at least some of tomorrow’s tape and see what we’ll get. If we paint 11 waves and then drop I might actually throw a few bucks into the market. And if we keep pushing lower and then rally hard I might start believing in the long side.

Here’s a good example of why MACDs or stochastics fall apart in heavily overbought or oversold markets. But the message still remains – we are really overbought here and at some point we’ll see a multi-day drop.

I think the CPC doesn’t know what to with itself – we’ve got a strange inverse situation happening over there as well. Beats me why it’s pushing up along with the tape now – maybe it didn’t take its meds again, just like last December.

Final chart for tonight – the NYSE McClellan (a medium term trend indicator) is pushing into extremes – high as a kite I might say. Just a matter of time of when cold turkey sets in.

So, in conclusion – I’m glad I sat this thing out today and yesterday – was only playing with a few ES contracts and otherwise I’ve got three options in the running. But whether or not we’re in Primary {1} or {2} – a correction is on the horizon and most likely soon. I hope we get a nice confluence of signals that shows us that it’s time to pounce – I’m watching the Zero Lite for divergences and signs of weakness in the tape. But whenever that happens – be aware that the market may stay irrational a lot longer than you thought/hoped – so keep your exposure small.

G’night.

Mole