Reminder: Harlan is available to chat with Members, comments are found below each post.
When I look at the short term index charts I key in on two things that makes me want to stay away on the longside today.
1. Closer to trend channel support
2. This could be a 4th wave (Red D)
If true? We’ve got one more trip to a retest of the lows for a 5th wave down to complete this pattern. That is unless? Unless it was a 3 (Red ABC) down affair and that’s it here comes Santa Claus. Lets get to that last half hour shall we? Its just a really hard call right here.
The micro charts below say sit back here for a bit BUT the daily charts are right there for a potential crossover.
Here are the daily charts. Whether one is bullish or bearish doesn’t matter, its all about the DAILY CHART FREQUENCY 123 in blue.
What you’ll also notice when looking at it from a bigger picture perspective is this whole blue 123 could be one big snapback rally. This is why yesterday I said in the shortside section any run could be a last dash higher. Why do I say that? Just take a look at the chart below and the date of course.
And the rest is history as they say.
So what do we do? Well we hold our long positions for now. What we will also do is WISELY spend this time getting prepared in advance for next year by getting our skills honed in on the short sell patterns we want to focus upon.
I mentioned yesterday that we’d look at the bullish and bearish counts but I gotta level with you they really haven’t changed. In my humble honest opinion I’m leaning still towards the best we see is a retest of the October 2011 highs with maybe an overcut that ends up being a shake and bake shake out high.
Should this occur? YES we will be doing Inverse Index ETF’s for short exposure for those of you who can not short individual stocks. IRA folks this applies to you too. As for 401k’s? Nothing wrong with moving out of equity mutual funds for a bit and into the cash or Money Market equivalents on strength. Same goes for variable annuity sub accounts. I really need you to protect those assets.
SHORT SIDE WATCH LIST
One pattern that we want to be on the lookout for is that of issues stagingFirst Thrust Downs and in the process of putting in snapback rallies.
12-16 In Yesterday’s newsletter we touched upon the First Thrust down chart of the Euro. Today lets take a look at a few more examples of the past that we can use as a guide.
And for you gold bugs?
From here on out we’ll want to get ourselves prepared for the shortside.
12-15 We know what we need to see to take some killer short sells and one such pattern is above however the market IS the boss and its really just a matter of whether or not we can get some sort of snapback rally, short cover rally call it what you will.
If we get it? I personally am of the opinion that its the last dash higher and needs to be used to get to cash and either short, get short exposure via inverse ETF’s or what have you. We’ll see. Right now we are in the middle of the road and for me I can’t wait for the weekend to get here fast enough so as to be able to really really hone in on the big picture bull count and bear counts.
12-16 Below are a few names setting up. With all of the below they are still setting up and need some sort of rally in order to complete the set up. the mantra with these is"
"WHAT DO I NEED TO SEE TO MAKE ME TAKE A TRADE ON THE SHORT SIDE "
We’ve laid that out for you in the chart notes below. Again, this is just a name that needs more time and that we are WATCHING.
LONG SIDE WATCH LIST
"Only The Best And Forget The Rest "
"We Trade What We SEE, NOT What We Think, Hear Or Fear "
SWI
12-16 Hmmmm a retest of the lows from a few days ago with a launch off of it higher? Sure that’s what I need to see.If that’s the case? Its that micro 5th wave that would be in play. Market makes the call.
12-15 This name currently looks decent here. I doubt it retests it highs but for a hit and run? Lets get to Friday afternoon first. The flip siode to this that a bounce in this name could be just that, a bounce that sets up a Right shoulder of a head and shoulders top or a bear channel, snapback rally just like SPRD did and then rolls over. So we really could be looking at two trades coming our way over the next few weeks with this one.
APA
12-15 Holding the blue line support for the time being. CAT is too by the way but we deleted that name from the list.
HITK
12-16 As you can see it broke a pink line POH to the upside. so why did we not issue a trade trigger alert? Because of what the first two charts at the beginning of this newsletter were saying.
AKAM
CVLT
CURRENT POSITIONS
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
NOT YOUR EMOTIONS!
LONG SIDE POSITIONS
VHC (We are long 300 shares of this at 21.64 as of 12-13-11)
JOY (We are long 150 shares of this at 87.13 as of 12-13-11)
NUS (We are long 250 shares of this at 46.42 as of 11-28-11)
12-14 Playing with the 50 day average here. So no big deal as of this moment in time.
12-1 Looking ok here. A break below the C (red line) and we have to walk away.
