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Pastimes : The Philosophical Porch
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POKERSAM
To: Rarebird who wrote (14599)8/19/2022 8:12:55 PM
From: Rarebird1 Recommendation  Read Replies (1) of 26251
 
I am now net short. I liquidated all longs within the last hour of trading on Friday, 8/19. My reason for doing so was primarily the breakdown of the A/D line on the NYSE on Wednesday and Friday. In hindsight, I should have sold late Tuesday when SPX backed off from its 200-SMA.

I have been saying all along that this was a bear market rally with upper resistance at SPX $4400 and lower resistance at $4250. I also have been trying to narrow down the rally to SPX $4330 - $4350. The high on Tuesday was SPX $4325.

There were other factors that made me sell. For one, the Market was beginning to decline on Fed hawkish jawboning, whereas during the rally the Market was ignoring the Fed jawboning. Clearly, the stock market took its cue from the bond market where yields began to rise again.

I will be watching carefully for another entry point on the long side.

The danger here is that SPX declines to $3500 level. I think that is quite possible.

Bottom line: my upside targets were hit and the A/D line began to break down. Plus, traders became bearish as the Fed jawboned the Market while bond yields rose.

I am neither a permabull or permabear, but a swing trader. If I am wrong in my assessment here, I will reverse.

One other thing: this may be just a correction with SPX declining to the $4050-$4080 area. But $3500 SPX is a distinct possibility.
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