Wow! Finally a 1% and then some decline in the S&P500. This is goodness for those of us who specialize in the long end of the stock market. But because I'm an excellent trader I actually made money today on the long side. I played Dollar General (DG) this morning and took an $80 and change loss on it after about an hour and a half. Later in the afternoon I saw the unmistakable signs (again) of a bottom and played once more - this time with more success. Both buys were off what appeared to be a dummy spot. The problem with the first one was that it followed a low volume candle and that made it a low probability trade. But the second one was following a high volume candle which raised its success probability appreciably. Also after the second dummy spot there was a gap up and I took the trade on that formation.
So you see even in a market as relentlessly sold off as today's was - if you pay attention you can make money long. Or, even in a market as relentlessly sold off as today's was - if you had gone short DG at the second time I went long you would have lost money. You have to be careful.
Are we now going to see many days of down - I don't think so. The market in general needed a good shake out and today it got it.
The up/down ratio sits at 18%(!), new 20 day high printed 156 (!) and new 20 day lows printed 607 (!). The VIX is now 15% above (!) its 10 day moving average and the three sisters, the ugly stepsister and the proxy for the stock market of the 22nd century - Goldman Sachs (GS) all threw off red candles in the last hour. How beautiful is all of this when put together in this manner? Boomer tomorrow - maybe.
The magic coin loses another and goes to 33 and 21 - not so good. For tomorrow it sees a bear. Dumb coin.
You better watch out, better not shout - Santa Claus is coming to town.