Tuesday, June 29, 2010

Stocks Get Hit With Selling

Today was an ugly day for stocks as the market gapped down sharply on the open and continued to sell off  late into the afternoon. I had on a few longs which I timed into really well  last week but on the open today these longs literally took my head off! One of the stocks I was long was EWZ which I was basically flat on as of yesterday's close. My stop was only about .80 away making it a low risk trade but after today's gap lower open, I easily lost twice as much as I planned to risk.

On the open I was stopped out of all my longs and  immediately bought TLT (bonds) which rallied all day.  If you read my post yesterday you would know my reasons as to why I was bullish on bonds. I also shorted the Euro as it seems to be much weaker than the British Pound and the Swiss Franc.

Above is a daily chart of the S&P500 and as you can see the head and shoulders pattern has been confirmed today with the S&P closing below the neckline. If this pattern plays out,  stocks can fall a lot more in the weeks to come. I'll be looking to short rallies as they unfold.

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