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Market Recap: Guess Wrong On A Close Day - You Get Torched

November 12, 2008 5:08 PM

samurai.jpgWell, I guessed wrong - twice -  today and got the torch handed to me. This is what happens on close days - when you are wrong. The market will either reverse and go positive or be bombarded with late selling. We got the late selling today. If I had just listened to myself when I said at the open ” the odds favor a reversal tomorrow, not today, as these trends tend to last 3 days.” Duh. I get the dunce hat award for today, obviously. At least I am posting for all to see that i was wrong - and lost. I knew today was risky and took a shot. But was i long at 1000 on the SP? No way. I was sitting and waiting and waiting as i have been advocating. Not long enough, obviously. Today was the first day I took a swing long since the the SP made it’s short covering rally on Oct. 28th which I considered total nonsense. I was wrong.

At any rate, i was going for the possible homerun and knew it was either going to go positive or likely close at or near the low of the day. It was going to be one or the other and i knew it going in. We got the other. At least I said early this morning that if “the early low cannot hold, we are going down”.  It cleared and down it goes.

My personal guess is that the SP low is not important here. I have said the low on the SP was total nonsense since it happened. The only low i consider important here is the Dow low of 7773. I believe that has to hold on further weakness. If it cannot, we have the 2002 lows and that is all. Personally, I want a new low on the SP above the Dow low and that “may” contain the selling.

However, the news is getting uglier by the day. There has not even been one piece of good news anywhere to be found.  Best Buy came out this morning and said it was the worst it has ever seen. That’s probably not a good thing.

Tomorrow should get very interesting. Any bounce I still consider nonsense. We need a very strong rejection of a low, IMO, to contain the selling and give the longs even a glimmer of hope here. It is possible that we may see a bounce above these SP lows, I am not sure. However, i would be very, very skeptical of it. I also mentioned last night to watch the low on Goldman (GS). If we were to contain selling today, that low should hold. It didn’t.

Now if I would just take my own advice and not try and guess at a close day rally, I might actually have enough for Christmas to buy a bigger piece of coal. Anyhow, i took a big swing today on the chance of a late reversal. Didn’t happen and I knew what would happen if I was wrong. That’s the way it goes. At least I exited when saw that I was wrong. I may make dumb trades, but I am not totally stupid. I would rather take a loss and move on than be an “investor” in this market.

Hey, at least I was right on Electronic Arts (ERTS). I said it was a strong sell. Down almost another 12% today. I am correct once in a while. Never, ever buy gap downs that are sold, IMO.

In addition, I have repeatedly warned being long up near 1000 on the SP and have said patience, patience. I am guessing that many others were screaming their bull horns - I was not. What do I know, I am just some amateur typing my thoughts “out of his garage” for fun and they are the professionals - i guess. To be fair to all of the talk shows, this is easily the most difficult and risky market we have seen in over 10 years. It is virtually impossible to be correct for more than a few days.

The reason i do this site is for fun, and am not a professional on any level, as i have mentioned many times, and so i can go back and look at my thoughts and see where i messed up.While I was wrong today that 865 “appeared” to be a good low, i knew the risk and what had to happen today. It was either going to hold and we would likely see positive or it wasn’t. It was as simple as that. Sorry, I beat myself up when I am wrong, plus it cost me money, lol. As Cramer likes to say “where is that cheap scotch”.

Written by Tom@StockBlade.com · Filed Under SP Futures 

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