If I Were a Hedge Fund Trader, I'd Now Be Feeling ______

[TopstepTrader 10]

You should know that the big money moves markets, not us small traders. You always need to remember that behind this amorphous monster out there we refer to as "the market", there are people who control a lot of money, and they have strong emotions about this money, just like we do. The only difference is, they feel stronger about it because their careers, in addition to their paychecks, are on the line.

 

As of the close on Monday, September 17, this is daily chart for the S&P mini's:

 

 

So, now that the markets have had some major upward movement over the last two weeks, it is good to ask yourself:

 

1. If I was long from a month ago and had a sizeable profit now, do I think the market has more room to go up and so I hold on for greater profits? Or do I think this is the end of the line and, since I don't think it will go up more, it's time to sell?

2. If I just bought into the rally a few days ago, do I want to try for more profits or get out now?

3. If I just entered a short position, how do I feel about my position at the current market state?

4. If I'm flat, do I want to take a long or short position here?

 

Last Thursday, the market had another big rally up based on the Fed QE3 stimulus announcement. It is very telling how the market has reacted since then. The next day, Friday, the market extended its rally only to be pushed down before the end of the day. And Monday, the day I wrote this, the market had a small pullback, showing some profit-taking.

 

All this tells me the bulls aren't sure yet if they want to push prices higher after such an extended rally; most contract holders aren't ready to say the rally is over and are still holding on to their positions; shorts aren't ready to bet on the downside yet. We may be in a relatively tight range for a while until the market collectively decides if the news was worth the run up, or if it was a knee-jerk reaction and will come sliding down again as more sellers take profits. Either way, I'm going to watch very carefully where trend and volume gains momentum to move the market from here.

 

Many Profitable Returns,

Trader Gregg

 

Mr. Killpack has been studying the markets since 1988. He has read over 40,000 pages about trading and investing strategies, fundamental and technical analysis, and related topics. He began day trading in 2001.

 

TopstepTrader http://www.topsteptrader.com seeks to find and develop undiscovered trading talent from around the world. While in our program, those who display a strong trading skill and aptitude will be backed as a fully-funded trader.

[TheDude 10]

Heres what Id do in such a situation (if I had a spare 50k cars...)-

 

squeeze the market even further up. entice them all in. Sell 'em all I had. Sit back and watch everyone run for the door.

[BlueHorseshoe 10]

Heres what Id do in such a situation (if I had a spare 50k cars...)-

 

squeeze the market even further up. entice them all in. Sell 'em all I had. Sit back and watch everyone run for the door.

 

Just so long as you don't forget to buy back your entire inventory at a massive discount a month later . . .

 

BlueHorseshoe

[MightyMouse 12]

 

Mr. Killpack has been studying the markets since 1988. He has read over 40,000 pages about trading and investing strategies, fundamental and technical analysis, and related topics. He began day trading in 2001.

 

 

40,000 pages is a lot of pages.

[Berzerk 10]

40,000 pages is a lot of pages.

 

 

Does this include the pages you read more than once? :rofl:

he writes some interesting and thought provoking stuff, then you read the footnote and it's difficult to take him seriously