As we posted in our account at 9:37 AM this morning we went flat and sold all our positions from yesterday into the gap. Why? Ag-Chem sector was weak due to POT earnings but more importantly there just didn't feel like there was any excitement --the sound of the panting breath of bulls wanting to get in so as not to miss the bottom was missing. It was quiet. And the opening print was the high of the day. It was time to get out and re-assess.
What now? We're sitting on our hands. If we had gapped down then the fear trend would have not been broken but the gap-up reset it -- meaning we have to wait again for an extended more down. As we've written in our newsletter and in this blog many times over the last 4 years -- when buying support, the bounce is your exit. If the bounce fails, you have to sit patient and wait for the selling pressure to mount again.
We were anxious not to miss the "bottom" just a few days ago -- now we're happy to just sit and wait for more clear signs. We're technical traders, sure, but if you've watched us trade live on Twitter by now you also know that there's a lot of "gut and instinct" involved too -- and right now we see no edge. So we wait.
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