Luna $ Ticks

December 26, 2008

Thin but Below

Filed under: Trading SPX SPY — moontrader @ 7:18 am

Although Wednesday the market traded on a low – and slightly positive – volume, SPY remained below DMA 25×5, which increases the odds of a short-term downtrend and probably a nearing sell-off. Check out the chart and notice how indicators continue to turn negative:

spy-122408

In my view we should have some sort of a sell-off in the next couple of days, so the scenario of a short-term bottom between the 30th and the 5th remains intact. Otherwise, I’ll start covering my shorts. Volatility decreasing is the only disappointing element in the whole scenario, which is delaying the profits in my positions (after catching the tip of the top on 12/17 to go short, I’m still even!). But I believe that, with a little increase in volume, stocks will go down in a more significant movement and volatility will go back above 50.

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8 Comments »

  1. moon:
    Happy Boxing Day1
    And thanks for the update.
    Volatility crush sucks – it’s killing me.
    We need a sharp sell-off for the volatility to spike.

    Let’s see what the next few days bring.

    Comment by DalalStreetKing — December 26, 2008 @ 10:48 am | Reply

  2. Thank you!

    I traded DXO on the long side today for a 10.4% profit but stayed in my FAZ position from last week that is up 19% currently.

    Comment by TraderTamas — December 26, 2008 @ 4:22 pm | Reply

  3. Comment by fuzzygreysocks — December 26, 2008 @ 6:17 pm | Reply

  4. Comment by fuzzygreysocks — December 26, 2008 @ 6:17 pm | Reply

  5. Moon,
    My DMA(25,5) says 86.8776, which SPY closed above it… not sure why it’s different from yours?

    Closed all shorts on 12/24.
    Everytime I see this pattern, we had rally (70-80%).
    Short or long, I will go with the flow on Monday.

    Comment by JDezine — December 27, 2008 @ 2:34 am | Reply

  6. fuzzygreysocks, I see similar situation as well

    Comment by Forkoholic Serge — December 27, 2008 @ 4:39 pm | Reply

  7. Moony,
    any good projections for February/March?
    cycle suggests new lows

    Comment by Forkoholic Serge — December 27, 2008 @ 4:44 pm | Reply

  8. Larry has Jan 8th CIT date
    Last 2 Larry’s interviews on Tiger
    rtsp://tfnn.s3.amazonaws.com/LarryPesavento122608.mp3
    rtsp://tfnn.s3.amazonaws.com/LarryPesavento122208.mp3

    Comment by Forkoholic Serge — December 29, 2008 @ 12:55 am | Reply


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