Would You Buy This?

The violent buying frenzy of Friday spilled over into today's trading session.   My bearish skew of the market continues to get tested.

Just looking at the buying pressure throughout the session, the relentless bid, coupled with the dips that are feverishly being bought - it is very difficult to look at this market as one that is ready to resume a decline.

And perhaps it won't.  Perhaps the bottom is in.  Perhaps new record highs await us into years end.  Maybe 2016 is the year when stocks fall apart.  Or perhaps we never see a red candle again.

One thing is for certain.  As the buyers come and lift prices with reckless abandon, stocks are starting to turn from a chart perspective.

But they haven't turned enough for me quite yet.

Let me leave you with this to ponder.

Is this chart of something you would buy?  Or something you would sell?  Please comment below: as I will.  Thanks.


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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14 thoughts on “Would You Buy This?”

  1. It looks like an inverted spy chart. It all depends if it is making a wedge/pennant or a flag. to me looking at most indicators i would say that chart is a buy at this point. maybe the last day is tomorrow then back up or maybe tomorrow is up, but i think it is oversold on your chart.

  2. I only look at the last five candles. This one looks like a run from .005 to .35. Now putting in Lower lows, lower highs. Depends on the mood the next candle. Likely I’d take one look at this chart and flip to the next one. Even tho a few candles are money makes in the recent history.

    Overall markets, five year trend, “W bottoms”, all that jazz is noise. During the day i trade with TOS and nothing else open. No tv, no radio, nothing but bird feeders and a nice walk along the river when I’m unsettled I follow the MOMO, care less the symbol or the past five years.

    That’s just me. Can take the trader out of pennies but can’t take the option trader out of penny thinking.

    (+$185k on the year, most by February. See my ihub posts. Every their in screen shots.)

    Make one trade a week when the chart is ready AND it matches MOMO….

    Play one or two, learn them.

    My markers prediction goes as follows: buying momo, I buy calls, selling momo I buy puts. Sometimes I sell premium if I’m really bored.

  3. If I go back many many moons ago we had a similar situation in the correcting market where the psychology was so biased that many could not wrap their heads around any type of rise for any length of time and just waited on the sidelines…and waited and waited for the final fall to show up. It didn’t. The market kept ratcheting higher while weak US economy would say…whaaaat?

    I agree with you that its hard to dismiss more of a meltdown but we also know that the market will do things we may not explain until much later. Maybe play the short term trend until it cracks. I’m on the trend side for now and particular about each play as I seek out squeeze plays. glta

  4. looks like TZA or VXX charts…so hard to figure right now…S$P levels 1996 and 2010 will be the real tests. How the S&P react when/if reaching those levels is a bog tell…Will it blast through or pull back at those levels… Headfake at that level, etc….should be clearer by end of this week. But rift now with no interest rate increase where can people put money?? stocks stocks stocks…i can see S$P back up near 2100 or down near 1880 by Oct 16th…neither would surprise me.

  5. John I agree. I could pull up every bearish chart and it means nothing in the face on unprecedented central bank stimulation. However I will say that charts are starting to work better

  6. That’s exactly what the market has been saying for the better part of a week. There is no place to place your rotting cash hoard that they all have from the massive sales drubbing in the 3rd quarter. With that oversold condition, they have been buying all the cheap blue chip and speculative stocks again . Now energy is another catalyst. Let’s allow a weaker dollar to form too. China weakness is overblown. Hang Seng churning North.

    The SPY just keeps riding along but at some point the rug gets pulled just a bit. The short cover game is working too so what’s not to love? SPY 200++

    OT: TWTR is going to be huge for weeks until the selloff hits. Should be plenty of buy opps along the way for weekly calls for those who did not get on board early last week. Looking for nasty fearful dips to add more calls along the way. This is market proof and I love market proof stock plays.


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