Well, we may be seeing THE FLUSH here. Oversold readings will be off the hook and flashing extreme at the open.
There is a saying that you don’t need analysts in a good market and they will kill you in a bad market. I had CNBC on for a minute this morning, (literally the first time in years), and Tom Lee looked liked he had his big wheel taken away and looked close to tears.
HERE IS WHAT TO DO NOW
I realize that you folks don’t JUST have my ideas, so if you are very long here you will have some pain continuing from last week. Oversold reading should be crazy extreme at the open, so the possibility does exist that we will see a vicious counter trend rally at some point soon.
“Selling in the hole” means selling out of extreme fear at the open of the market. It usually also means getting the worst prices. This is when hedge funds are selling, maybe because they have margin calls, maybe because they are petrified of under-performing so they sell the kitchen sink and limit the damage. Its usually wrong thinking.
Right now I am watching this and just watching. I may start some nibbles at some point this morning and will certainly do a small add to UPRO and/or TNA soon. I only took a 1/4 position Friday so I would be able to add if this sort of thing happened.
This sell off is nothing to sneeze at. Shanghai is down another 8-9% overnight and the S&P is down almost 4%. That is scary for sure. Crude is around 38.60, so firmly under $40 now.
I will say that the “feel” of this market has changed. My feeling has also changed. Although I think a rally will come, when things get this oversold they usually snap back hard, but I am more interested in looking at short setups on rallies.
That will be a conversation for another day soon. Lets get through this first.
See you guys in the chatroom soon.