Trade what you see, not what you think the stock is going to do. Truer words were never spoken. Ask Tim about $GENE and me about $IWM. While you have a pretty good idea that a stock is going to crash due to charts, technicals, news etc. timing isn’t always on the mark.
Time knew as did most of people in the chatroom that $GENE is going to crash, that was a given. Tim traded what he thought it was going to do and shorted $GENE (unsuccessfully) many times this past week. Tim doesn’t do indicators like Moneyflow Index but if he had he would have seen that when he gave a short alert throughout the week, the moneyflow and level 2 buying rose right away. In other words, the chatroom was being monitored and someone ($GENE insiders) were squeezing him and everyone else who shorted off the alerts and drove the price even higher. It’s not a coincidence that $GENE crashed on a Friday….insiders finally sold.
This past week the $IWM is giving strong topping signals, so I shorted before the price action gave a determinate sell signal. Big mistake. This ETF (following the $RUT) continued to rise in price. I traded what I thought the price was going to do, not what I saw. I have no doubt the markets will reverse their climb soon and a correction will follow but when is the question.
Moral of the story….don’t try to predict the trend. Sometimes it will work out other times you will wind up paying market tuition.
James
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