After getting my ass handed to me over the last couple days, and obviously not covering yet, I got to thinking. Why the F#@% do I have so much conviction short. I understand that getting in front of a runaway market and picking tops and turns are VERY hard.
However things are lining up for a reversal and the market just continues to print highs. I know the “market can stay irrational longer than you can stay solvent”; don’t preach to me because I know. I have learned the hard way. (Losing my ass multiple times and maybe this time too?)
You would think that EVERYONE is making money. I know like 10 bearish people TOTAL in all of Stocktwits and Twitter (respectable ones anyways).
People have asked me multiple times WHY AM I STILL SHORT? Well you are about to find out. (also I hate capitulating so I am doing my best not to do that)
I am short the NDX with an average price of 5173 (I just checked), and I am holding because the leaders are set for a fall, just haven’t turned yet. See MANY examples below.
AAPL – This is at ALL TIME HIGH RESISTANCE. Probably not getting through the first time. Printed an RSI of 89 and should start to pull in even if methodically.
FB – At resistance with divergences and an earnings candle that has yet to be taken back yet (albeit barely). This is in control until a new high is printed. I believe this starts to fall as well.
NFLX – Divergences and should reverse here
TSLA – Earnings coming up and the shorts are squeezed. This is at SOME MAJOR RESITANCE for 3 years at the TOP of the range. You don’t buy the top of the range. I think this turns down.
GOOG – Sold off after GREAT earnings and showing some divergences on larger time frames.
There are many more of these. The signal is there. Am I uncomfortable? A little bit. Definitely. I hate losing.
ALL of these could use at best a rest and that is why I am holding short still for this pull in. THERE I will decide to hold the short and keep it on or cover (and I am going to want to hold so bad). This is the current plan, I obviously have the right to change my mind whenever the F%@# I want to.
But this is where my head is at.