Friday, October 2, 2009
Reasoning Behind The Madness
Today's BUY or LONG Alerts were very controversial it seems in many of the members eyes and at first i am sure i looked crazy to be buying given the wickedly negative news and super bearish action taking place ahead of the market open BUT BUT BUT.... i will now explain the reasoning behind my madness and i am sure it will all make sense and i bet by the time i am done explaining, you will tell yourself: "damn it!! I shoulda went heavy long at the open, VERY HEAVY LONG!!"
OKay, first of all: after thursday's super bearish trend day lower, many stocks getting destroyed, i knew that there was almost a 100% chance of a negative reaction of the employment numbers that were coming out friday morning before the open. It written in the charts and it was OBVIOUS! (I am actually shocked i didn;t take any swing trade SHORT positions coming into friday morning, but i promised you guys i will stick to day trading for the rest of the week so i had to keep good on my promise). If I saw these bad employment numbers coming: giess what? I bet you there were tons of other traders thinking the same thing and chances are very high that many went short if not heavily short coming into friday morning!! They got what they wanted the down open and that was a gift: CAN YOU SMELL PROFIT TAKING ON SHORTS OR SHORT COVERING??? easy money coming our way if you dare go long! You need to think outside the box folks!! You need to think about what other traders are thinking. You need to Out think the guys who are trying to out think you! You need to be able to distingish between what IS OBVIOUS AND WHAT IS NOT OBVIOUS!! This morning's selloff open WAS OBVIOUS! Obvious trades get faded fast when trading the stock market!
Anyway, come friday morning i got a text message from a friend of mine in switzerland(who has been bearish on US stocks for ever!!). He was soooo happy(and i mean really happy!!) that stocks were getting ready fall apart two days in a row. He only trades options so obviously he was gonna make a killing on his puts!! Good for him: always happy when people make $$$.
Watching CNBC the mood was very negative and somber, it was obvious a good volt of fear was injected into the market again! AWESOME news for bulls!!!!
Once the market opened, i monitored the attached chart very closely: please take a good thorough look at these charts and a LIGHT WILL GO ON IN YOUR HEAD!
Look at where the indexes gapped down: do you see that?? DEAD ON SUPPORT and INVESTORS WERE SUPER NEGATIVE AND we just got done with a 210 point drop on the DOW JONES the day before!! We about to open 100 points lower!
Ladies and gents: That was a BUYING OPPORTUNITY HANDED TO YOU ON A SILVER PLATTER. You just needed balls of steel to jump in front of a scared crowd and fade many eager shorts with very obvious trades.
see you on monday!
Posted by Stewie at 6:57 PM
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