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If you are short, stay short!

June 11, 2010

A SetUp with possible bearish stance

For all the bears out there who loaded up on their puts and index shorts, the setup right now, justfies a full blown gap down. No questions asked.

The bollinger band I am using is 15 days look back with 1.5 standard deviations away.

The last time, this kind of a setup came up was on the 16th,17th,18,19th Feb. On 16th the markets showed huge strength. Rising 80 points straight and closing right on top. But with that, it had some serious walls above it, in the form of the bollinger band top.

On 17 th Ms. Market opened higher, but coudnt sustain those levels -weakness, strength fading and in general a bearish candle. On 18th similar story again. On 19th, the market imploded under its own bearish weight and fell, opening 40points lower before plunging close to 85 points at its lows.

I strongly feel, the fall will be even more swift, trapping the hopeful bulls who entered at this level. But seeing this weakness, there will be many bears who will try to jump in. For them, I dont see much money coming in, and by corrolary some frustration. Even if it falls, I dont see it falling much below 4970-5000.

This market is a witchy lady, and a charmer who traps with her beguiling charm.

Soham

Update on Monday, June 14th, 10:01 am

I wont pussyfoot around, taking less than the share of “mea culpa”. I was clearly wrong, the markets have moved up against my expectations, though didnt bet on this, but this post ought to have showed you the perils of discretionary trading, if nothing else.

For folks with a longer time frame, might have this thing going in their mind, lets check till tomorrow, but for me, I was betting on open, and open has clearly proved me wrong. I am out! Theoretically

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One Comment leave one →
  1. June 19, 2010 3:37 am

    On a higher time frame, I’ve just put in a similar heading 😀

    http://www.inditraders.com/technical-analysis/3413-expecting-downside-reversal.html

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