Bill L.'s  Instablog

Bill L.
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Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
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  • Initiating A Short Trade 2 comments
    Feb 4, 2013 4:02 PM | about stocks: SPY, DIA, QQQ, XLF, IWM, SDS, SPXS

    People have been asking for real time setups, rational, explanation, so here you go:

    (click to enlarge)

    Taking a shot on the short side today if we can clear the current level of support (highlighted as a green rectangle). The SPX has broken through some momentum bands (which I use to initiate trades, identify the trend, and create stops), and has done so with a growing list of technical indicator divergences, as well as with some pretty extreme senitment figures. The two levels of resistance overhead can be used for stops of your choosing depending on risk tolerance, position size etc.

    My long term trend model still says we're in a cyclical bull within a secular bear, so short trades should be given less tolerance for failure. Meaning, smaller position size, or tighter stops, of a combination of the two.

    Full update tonight.

    -Bill L.

    Disclosure: I am short SPY.

    Stocks: SPY, DIA, QQQ, XLF, IWM, SDS, SPXS
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  • Bill L.
    , contributor
    Comments (691) | Send Message
    Author’s reply » I'm readying getting questions:


    In terms of time horizon, I expected to be in here for a few days minimum if things continues as expected. If we really get rolling on the downside because of the extreme sentiment figures I could see a pretty swift corrections lasting two weeks of more as the overzealous bulls get washed out.


    -Bill L.
    4 Feb 2013, 04:10 PM Reply Like
  • Shelby Cardozo
    , contributor
    Comments (1599) | Send Message
    I wouldn't mind more pullback myself, those of us in the initial investment phase need more good stocks on sale.
    4 Feb 2013, 06:19 PM Reply Like
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