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Even though it was approaching midnight (EST) on Monday, your faithful Tim was in the trenches, offering his market views. Last night, I stated, “The mega-spike we had last Tuesday PERFECTLY tagged a major Fibonacci level (I can’t believe I didn’t notice that until now) and, as of this very moment, the /ES is challenging the next lower level. In other words, there could be MAJOR support here”
I’d like to tell you about a trading error as it’s happening in real time.
A couple of days ago, I bought MDB puts. They came out with earnings, and the stock soared. I dumped the puts the next day at a 50% loss.
I therefore have earnings-terror-on-the-brain. I thus sold my COST puts at about a 100% profit, even though I think the pattern is still dynamite. Thus, I am out of position, guaranteeing the stock collapses after the close today when earnings are announced.
Just sayin’.
If you want to see how chart-compliant the market is being, look no further than the Russell 2000 futures (symbol /RTY). The market was plunging, but BANG, the moment it got to the supporting horizontal line, it went zipping higher. As I’m typing this, it’s fifteen minutes before the speech, so God only knows what this will look like once Powell’s text is released.
Good grief! Here’s what we’ve seen over twenty-four hours, reading from left to right:
And the day isn’t even over yet!
The bears endured another day of emotional damage. The huge move up in the markets on Thursday, November 10, 2022, signals something we should all recognize about current market psychology. That “something” should be heartening for any bears left standing. What is that something? Fear. Now, understand that there are different types of fear when we are talking about market psychology. The explosive move to the upside of the markets to “less bad” CPI numbers indicates fear of missing out (FOMO). This is a useful bit of knowledge. It has been said that “wisdom is knowledge, rightly applied” so let’s see what we can do to make a difference next time.
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