I got trapped

Yes, it happened.  I fell for it, someone who didn’t has my money.  Yesterday’s positive GDP report created a nice rally that had me in for a swing trade.  The problem is it was just a false reversal based on the news, and the impending downtrend continued today.  The VIX fear index up 26%! and the markets down 2.75% today with the breaking of a minor price channel and a major trend line.  The weekly charts also indicate a topping and an impeding correction.

The lesson of the day is to remember about these false positives, and WAIT for confirmation of a reversal before taking my position.  An expensive lesson this morning, but that’s what happens when you lax your discipline.

Now that my trading idea is bearish, I will be ready for bearish move on confirmation of an established correction/downtrend.  Next week will be a very telling time.  In the event of a double dip situation, I will have to switch to fundamental mode to get the most undervalued stock.  Back in March you could pretty much have thrown your money into anything and it would have gone up tremendously.  This is the time that will separate the men from the boys.

Here’s an annotated chart I sent to a friend.  Shows you what I’m seeing right now.

SNPdave

 

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