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Direxion Daily Financial Bear 3X ETF Message Board

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  • nvest80 nvest80 May 9, 2009 6:23 PM Flag

    Get ready for Black Monday

    I disagree. Monday won't be that bad. I think they'll suck in a couple more "longs" on Monday morning, then sell off after by lunch time. World markets down Tuesday and we will go down hard on Tuesday and Wednesday of this week. I think we should be back to around 8029-8130 by the end of the week.


    But hey, if you are right with a lower low than March 9th by the end of the week I'm fine with that. I just loaded up yesterday late in the afternoon on Puts for May and June. That is Puts for "bullish" symbols and Calls for "bearish" ones like FAZ.

    If you look at the Dow, and not that I think this is the best indicator of the economy but people do look up to it more so than other indices. IBM is roughly 9% of that composite. IBM came down and is now fighting at the 100 level. If it breaks the psychology of IBM holders can change very quickly. In addition to that, the days of the financials 5-10% up days are running out. So BAC and C that make up around 2% of the Dow will no longer be as supportive. I think they will come down into options expiration and American Express that weighs over 2% on the Dow is approaching resistance at 30 and will most likely turn around as well as it is beyond overbought. Then we have Exxon and Chevron making up a combined 13% of the Dow. It looks to me like both are about to be topped out as well. So in summary, the overall market psychology could turn very quickly this week once the Dow has a 2-4% down day.

    If you look at October 19, 1987, the Black Monday wasn't just a one day sell off but a continuation of the previous weeks' trend. I assume options exp. was on the third week that friday which would have been October 16th. I can't see such an event happening this Monday. If it were to happen then I think it were more likely to happen next Monday after a "bad" week during which people realize that we aren't going just up from here. But I don't think that would happen yet, wait for the fall for Q3 numbers....

 
FAZ
32.10-0.15(-0.47%)Aug 23 4:00 PMEDT