Is Today a Market Inflection Point?

Several times a year, I get an eerie feeling when looking at my trading. I find myself scratching my head, and wondering, “is it going to get worse from here?” Many times I found that be the inflection point or reversal and trend. I’m not sure if today’s trading is that they, however, it does feel that way to me.

Generally, I’m not a technical trader, however, on the E-mini S&P 500 index futures there is a doji type candlestick pattern. Although there are not many other technical indicators showing a reversal, I still question the current move up.

Getting back to what I was saying, I found the “is it going to get worse from here” moment to be one of the best indicators retrospectively that I personally have. Unfortunately, even though I think I do things right from day to day, it’s days like this where I really wonder if that’s the truth. That being said, I’m well-positioned for down days and expect a correction of some point from here.

May 28, 2014, Market Inflection Point

May 28, 2014, Market Inflection Point

Along that topic, I read an interesting article on CNBC.com on Tuesday, May 27, 2014, titled, “Cramer: Magnificent Bull Nearing End, say charts.” Normally, I don’t watch Mad Money, nor do I often pay attention to what Cramer says, but this story was interesting. Cramer was talking with Mark Sebastian, the director of trading and investments at Swan Wealth Advisors, was made an interesting prediction that the ball is nearing its end. He discussed looking at the RVX (the VIX equivalent of the Russell 2000, or volatility measure) and said that after the last spike up on the RVX normalized at a higher value than after prior down moves. You like in this is similar activity that happened in 2007 just before the market crash.

Whatever your opinion, please make sure to trade small and take profits by managing your winners.

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