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US 500 - Potential Shorting Opportunity

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Probably all just hindsight, and, I'm stupid :D

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@dmedin,

Yes hindsight is a wonderful thing. 😁

You seem like someone who is willing to put the time and effort required to gain a better understanding of trading the markets. Trading is difficult. Consistently making profits year after year is more difficult and making large significant profits year after year is even more challenging. 

There is a lack of trading ideas and potential trades being posted as people are too scared in case they are wrong and others belittle them. Due to this fear there is hardly any trading suggestions being made for the future. This is from the 'so called' people who think they are mostly right and know best (or better than others). Where are the potential trading suggestions or potential trading possibilities from them? Where are the potential trade ideas or trade considerations from them?

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Haha, I will belittle myself constantly so that others don't have to.  :D

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If 20 < 50 SMA and the Parabolic agrees, then it might be time to short S&P 500 soon.

 

sp.thumb.jpg.eb1a38e1f5ae7c38880c98aafa6c625c.jpg

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@dmedin,

It will be interesting to see what happens next week.

The risk on the short trade right now is that this downward move is just a mere breather before the upward long term move resumes. One needs to be aware of that possibility which is just as likely as a larger downward move occurring. All it takes is good news from Trump, US, etc. and the US indices are storming upwards again. 

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I think there's a potential possibility of shorting S&P 500 brewing.  I want to wait to see if the 20 MA does drop beneath the 50 MA.

 

us500.jpg

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@dmedin,

I agree. Part of trading is about anticipation and being aware of certain scenarios that could play out even before they actually happen. There is nothing wrong with this. There will be times when you are right and times when you are wrong. None of us can predict the future price action with 100% accuracy. 

Yes, the potential shorting opportunity exists. The traders who are aggressive and have a higher risk tolerance will open a short far earlier than someone who is not. In fact some of them may already be 'short' and already in profit. Sometimes when using signals and indicators it alerts us after the price has already reacted so most of the profit can be missed.

I am not encouraging others to take a higher risk than what they are comfortable with.  Everyone will have a different risk tolerance. If you look back at why my trade was unsuccessful earlier on then you will see it was timing. I entered too late and therefore left the trade too late. Those who entered as early as possible would have been profitable and left the trade a lot earlier.

Downward moves generally are shorter in timescale than upward moves and can be sharp / quick. So getting in early and getting out early is crucial when 'shorting'. My experience in Commodities has taught me that and I think that is one of the mistakes I made on an earlier 'short' on this trade. I entered too late and exited too late. 

 

 

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Looking eagerly for any sign of a break below this new trend line next week.   :)

sp500.thumb.jpg.bdcef0c88682e3f8569766ab90a2c8b8.jpg

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@dmedin,

The downward correction has already began. The aggressive trend traders would have entered 'Short' once the 20 DMA was breached downwards. The next wave of trend traders would have entered 'Short' once the 50 DMA was breached downwards. The 'daily' is showing the price at the 100 DMA area. If this was breached then you will see more entering 'Short' with the potential direction towards the 200 DMA. 

However, it may not play out that way and those late to the party (and I was when I started this post) could end up watching as those entering early leave with profits and those entering late are left with losses. 

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This is the second potential shorting opportunity for not just the S&P 500 but for the Dow Jones and Nasdaq 100 since I started this thread.

Many of you will have already initiated short positions and be adding to your shorts as the price corrects upwards.

I have absolutely no idea how far down the prices will go down to for the three US indices but one must stay in the trade and only exit on a trend reversal. One must let their winners run. Timing is key. I found that out when I started this thread. 

The potential is there for the $2341 level to form a double bottom on the S&P 500. However, this could not play out that way and simply continue its resumption of the long term upward trend. So stop losses and trialing stops will be crucial. A profitable exit must be the goal from all three of the trades in relation to US indices for any short trade. 

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Looking very bearish. Gold and Bonds going up. The odds of a 'No Deal' Brexit are increasing. The US is no closer to a satisfactory conclusion with trade talks between them and China. These factors are all acting as the driver for the appreciation of Gold prices.

1841503515_US500_20190603_21_03.png.e452c6b638b26bdc0c824ee3fad621a1.png

The S&P 500 is trading below its 20, 50 and 100 DMA and is a whisker away from trading below its 200 DMA. This is very bearish for me. The other telling indicator when using moving averages is by looking at how they are sloping. A lot of traders merely ignore this vital point in my opinion. Both the 20 and 50 DMA's are sloping downwards on the 'daily/ which means if this price action continues then the 100 and 200 DMA should begin to slope downwards too. One must remember that when using and looking at moving averages that they are 'time lagging' indicators that change after the price has already reacted.

When one looks at the 'Parabolic SAR' then one can see that it is indicating bearishness. 

1497970796_US500_20190603_21_06.png.e73e321b2bd8373b5637ebb3ace47069.png

This price action has represented an excellent shorting opportunity to those who have taken it. It is about anticipating. Now some of you will ask how can you anticipate something which has not yet happened. I tend to look at the price of Bonds and Gold to help me get a feel of whether there is a 'Risk On or Risk Off' environment for equities.

'Anticipation' can lead to some fantastic 'Trend Identifications' earlier than one would otherwise. 

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