Category: bear market
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Chart of the Day: How to Trade VIX
At the first sign of a market sell off or correction, my eyes leave my well developed focus list and turn to the CBOE Volatility Index, otherwise known as VIX. During market selloffs, it is crucial that you learn how to trade VIX. Why do I love trading the VIX…
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Monday’s Game Plan and Free Trade Report
I am offering today’s Trade Report, which features my plan for Monday and the coming week, free to blog readers today. Enjoy! January 5, 2008 Market Notes The market is overbought. I’ll get back to that, but first let’s take a look at the overall picture. The market (via SPY-SSO)…
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Quick Thought: The Commodity Bounce
Many broken commodity plays, like the ag sector, have made big bounces today (as of 11:35 AM ET). Keep an eye on volume. One of two things is going to happen: 1. A low volume bounce which will be a “dead cat” signal. If this happens I will intitiate shorts…
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Market Notes and a Trade
There has been some confusion that I would like to clear up. Some of you think that I am bullish on the market because I am making long play on the S&P 500. Nothing could be further from the truth. This is a short term bounce play within a downtrending…
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Trading SPY and Stochastics in a Bear Market
If recent history is any indication, the next time the stochastic indicator hits an extreme oversold reading of less than 20, it will be time to buy the S&P 500. Since October the SPY has hit this level 6 times and made at least a three point gain in 5…
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Classic Bear Market Action
While I try to stay away from the chatter of market pundits, I do like to keep an eye on what a few select bloggers and “market gurus” that I respect have to say. What surprises me today is that I am hearing, even from those who I respect, that…
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Classic Distrubtion Phase Price and Volume Action
As I expected, last week’s bounce was prone to failure and it looks like we are going to test the late January lows. I am weighted to the short side, so you can bet I am giddy about price acton over the past two days. As we move towards the…
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Weekly Spy Chart
Analysis of the weekly SPY chart leads me to believe the market still has room for a bounce before the next downturn.Key factors in support of bounce:1. Bounce at major price support2. Stochastic oversold crossover developing3. More room to move until resistance reached. Note that each time stochastic has reached…
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Quick Trade Update
I was stopped out of SKF and bought UWM and DDM, which are ultra long the Dow 30 and Russell 2000. Looks like this might be the capitulation bounce we’ve been waiting for. Update: A few readers have asked how I timed the DDM trade so perfectly. I should have…
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Another Trade Update
I have decided to take on two more small long positions, BVN and HWAY. Both have handled the bad market well. HWAY is in the medical lab sector, which has been somewhat of a safe haven in recent times. While badly beaten stocks are usually the best short term bounce…
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Market Notes: Are We Oversold?
I am still finding this market tough to trade. I have no problem trading in bear markets, but my issue right now is that we are oversold, but not that oversold. So it’s tough to initiate longs or shorts. If I do decide to trade, it will most likely be…
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Market Notes
We are in a tough spot with regards to initiating short positions, and I’m in no mood to add longs. I was hoping for more of a bounce before short entry, but today’s move ruined my plans. Amazingly, we are still above last week’s low of 1378 (by two points).…
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Ain’t No Egg on My Face . . .Yet
Many were quick to get on me after the market failed to rocket up after my capitulation call last week. While I conceded that I could be wrong, I also pointed out that it is not invalidated until a breach of 1378 on the S&P 500. Capitulation bounces rarely go…
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This Bounce and Trade Update
I have received a few e-mails asking whether the bounce is over. I honestly don’t know. However, in my mind, it’s not officially over unless we breach 1378 on the S&P chart. There is still a ways to go down before that happens. I think what we are seeing today…
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Short Term Capitulation?
I have a feeling we might be in the midst of short term capitulation. Things look really bad, many former leaders are getting abused and it is really tough to buy right now. Note that does not mean we are going to see the uptrend resume. If we get a…
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High Flyers Have Lost Their Wings
My focus list, which is mostly comprised of momentum stocks, looked ugly today. Not only was there a lot of red, but many stocks have broken major support levels. Because of this, I cannot play a bounce in these stocks. I never play bounces when support has broken. Many of…
Paul J Singh 