Sunday, January 31, 2010

Talking Out Of Both Sides, Of Each Hole

Click graphic to enlarge.

Last week, in - Eating Popcorn - not only did I discuss trader Sol's outlook, but I also mentioned that his partner, Atilla Demiray, was waxing pretty bearish. Seven days ago, he wrote:

This type of divergence will lead a very powerful and very sharp sell off that even I may not be able to fully profit from it, despite the fact that I am the one seeing it, living it, breathing it right now. It will start in such a way that will trap the maximum number of traders on the wrong side and leave bears out of the move.

It will start in a way that the initiating move will erase all the cumulative gains one can possibly make trading this silly range during the last 2 months.

I am very confident about all these, but what I am not confident about is the sit tight part I have to do. Once this thing begins, believe me, the best way to profit from it is to shut down your computer and let your short positions stay for 5-10 days because the move will be perpendicular.

Like I said before, I don't know the exact time or place it will start but I know it will start in a week or so and it will be initiated somewhere within this range.

There you go, he called for a violent, *perpendicular* move to the downside that would start *in a week or so*. (Note, it's been a week.)

But today, I read his latest update - one in which he is now talking about *bouncing* into March. Today he writes:

But now, time to get cautious on the downside.

Yes there is massive down volume, all your oscillators are pointing to down, DMAs are turning but the only thing that matters is controlling trends.

Market will likely reverse to higher on Monday or early Tuesday from approximately where it closed on Friday. There are intermediate and short term TLs being tested across the indices.

This doesn't mean we may not see lower prices or some sort of flush. We possibly will but it will be tricky.

Say what? A 75 point bounce in the S&P from here? What happened to last weekend's perpendicular call? What happened to the drop so steep (within a week or so) that it would even *leave the bears out*???

I grant most everyone the right to change their mind.

That is, provided they have one!

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