Daily Update For Tuesday: Parallel Pending


December expiration is Friday. All December positions should be rolled over into January options. More later this week. 

On Monday the market took out the February lows just before the close, which instead of igniting Armageddon, it flipped the programmed trading switch to "Buy" when prices hit a major support line. A harder break of that level of support should do the opposite, i.e., prices begin to plummet with not a bid in sight and it will finally be curtains for any semblance of a "continuing bull market" and the 2007-2009 financial crash will become the market's immediate roadmap. 

If you knew then (4th Qtr 2007) what you know now (4th Qtr 2018) what if anything would you have done differently? Let me ask that a different way: If you knew in October of 2007 that the Dow S&P and Nasdaq were going to fall 50% in 18 months, what would you have done to protect your savings and maybe profit by shorting the market? 

There are no guarantees in this business, but the underlying economic conditions, investor psychology, and the price patterns of major indexes are all following the 2007 roadmap. Best part is as a parallel the market is still in late 2007, with the crash year of 2008 still to come. 

This trading system has been built with that exact set of circumstances in mind. As first observed in this past Weekend Update, everything changed around November 1st. And what at times was a frustrating struggle to get the entries and exits "just right," as Goldilocks likes her porridge.  Where earlier in the year the challenge was to bank gains before getting stopped out, or worse yet, holding a once profitable position all the way down into the red, or watching it expire worthless. The challenge going forward will be to not take too much of triple digit gains off the table, resulting in having excess capital sitting idle while the left-on positions continue to soar. In other words: 

"I made too much money while I could have made more." 

This is contingent on only one thing: A pretty bad market next year. All of those dominos are lined up and the first one or two have begun to fall. As I have written before, we are finally in the right place at the right time.


Charts of the Day-Week-Month-Year-Decade