tag:blogger.com,1999:blog-2335748440449035592.post1829362231529969970..comments2008-01-04T11:54:44.616-05:00TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2335748440449035592.post-75556028998517394792008-01-04T11:54:00.000-05:002008-01-04T11:54:00.000-05:00Hi Brian<BR/>First we've dropped from 1495 to sub 1420 in 5 sessions - thats a heck of a move and just like I take profits on the way up for longs, I take profits on the way down for Ultrashorts. Nothing goes straight down or up. Within larger term moves up, we have downturns, and within larger term moves down we have upturns. I expect some upturn relatively soon as sentiment has gotten bad, and we have lost a lot of ground in a very short period of time. I could be wrong but thats why I didnt sell the whole thing - no one knows the future. I layer in, I layer out. So with some huge moves in some of these Ultrashorts in a week's time I am locking in some profits. Consistent with what I have been doing since day 1.<BR/><BR/>As for 1440 we held that level for 2 days, and tried to bounce. Something like a jobs report cannot be gamed... if we had no news we probably would still be stuck in the "floor above". With such a violent move down based on news and not just on general selling I am unclear if we stay in this level or not.<BR/><BR/>See, overall we are in a strange environment where on days the politicians make a bailout plan or the Fed cuts, we move up. All other time frames we generally move down slowly but surely. I posted something 3 weeks ago where the Dow gained like 900 pts on days the Fed cut or Bush or Paulson put out their bailout plans, so just imagine if you took 900 pts off the Dow, we'd be close to 1k lower. Those are not things any chart can 'game'. <BR/><BR/>Last, just like buying a stock that falls back to a support level (say the 50 day moving average) you can't be stuck on something working 100% of the time. Nothing does. Generally a stock will bounce off that level so it makes a nice entry point. But if you are wrong and it slices through you cut back, takje the small loss and continue on. So for example my thesis is S&P 1400-1405 will be defended tooth and nail. But eventually fail. It might bounce once, might bounce twice, who knows. But if you play it from the angle it will be defended you cut back Ultrashorts at that level and go long. Eventually if SP breaks through 1400 you will be "wrong", but you can be "correct" a few times first before it eventually fails. Just like at S&P 1440, it bounced twice, and due to news event it failed on the 3rd day. <BR/><BR/>For all we know Bush says some magic words and the market rallies 200 pts (dow) this afternoon. Or Bush says nothing good and we get crushed. Impossible to 'chart' that.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-25070166320988719222008-01-04T10:37:00.000-05:002008-01-04T10:37:00.000-05:00What happened to S&P 1440 being the "floor" of the 1440-1490 level that we have been in? Since we are currently at 1425, it would seem to me that we have broken through that floor and are now in the 1400 to 1440 range you talked about as the "basement." Why cut back on your UltraShort exposure at a time when we have just entered another (lower) trading range for the market?Brianhttp://www.blogger.com/profile/06708811091120040283noreply@blogger.com