Kick Starting The Santa Something
So here we are – at the cusp of what we usually refer to as the Santa Rally. Will it happen again or will this year be exception to the norm in which we experience a sell off into Christmas? This question comes up every single time and my answer remains the same each year: Who knows and why would you care?
Sorry for bursting your collective bubble but nobody has a crystal ball and since the inception of Evil Speculator every single person who showed up here claiming to have some special insight in the market’s future direction has long since been washed out. Their bleached bones are now adorning the lair’s graveyard of shattered trading ambitions – perhaps as a warning to future generations of aspiring dare devil fortune tellers.
Alright, I can practically hear your rodent brains spinning right now: Well, if you’re so darn clever, oh Mighty Mole – then grace us with your wisdom and tell us what we actually do need to know. [give or take a bit of sarcasm] Well, I’m glad you never asked because I’m happy to smack you with the same answer I’ve been attempting to drill into everyone’s consciousness since day one. Price price price! And then price. A.k.a. the ultimate arbiter of truth – a.k.a. the only market indicator which is never wrong.
Why anyone would want to be short the spoos here right now I frankly don’t know as the overall trend thus far continues unabated. In fact we’ve got a hammer long setup today which triggers at 1810.02 (starting in tomorrow’s session). Now all that may change tomorrow – but as of now I still don’t see anything bearish on this chart.
UPDATE 3:45pm EDT: Great timing Mole – of course since my big speech things took at turn for the downside. We may be looking at a sell signal on the spoos:
Now, I would prefer to see this happening on the cash instead of in the futures. BUT if you were looking for a reason to start exposing yourself to the downside – here it is. Again, start small and pyramid up as things move in your favor.
Of course it hasn’t escaped my attention that not everything is rosy in our equities paradise. The Russell 2000 futures for instance are producing a NLSL sell signal today as we breached one at 1,132.3. So if you’re trigger happy to the downside then here we’ve got an actual reason for an entry. Mind you that we’d still be trading against the overall trend. Not a problem really as long as you play it small – like 1/2 R.
And whether or not we expect any symbol we trade to slip off the plate – I frankly hope to never encounter the words ‘massively short’ here in the comment section. If you do not understand my meaning then I suggest you revisit my old post on position sizing – our key concepts page may also be handy. And while you’re at it – check our our futures and forex risk calculators – they’ll make your life a lot easier, and much safer!
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