Are You Sure You Don’t Want To Sell? Why do I hear this more and more in my head lately? Probably because it’s prudent to my strategy to take long positions down or off.
But for the short term trader, the trading action is testing the strength of bullish sentiment to the point that institutional selling pressure is capitulating the few retail investors that are entering the market at these levels. At least thats the emotional pressure that I have been experiencing on a few trades this week as the market drifts into some really compelling short term buying opportunities.
Stress and ambiguity of broader market price motion is creating an imbalance in price action, and I think that in specific cases the pressure to sell out of the market here will in turn create the inevitable chase that everyone is waiting for be it only for a short time.
Specifically, more and more often stocks are testing technical levels to the penny and in some instances being “manipulated” during breaking news to shake out the weak at a stocks most profitable entry point. The subsequent short but powerful moves higher after this shake out could trigger frustration factors of chasing the market higher in a frenzy of unawareness.
Being aware of these shake downs is key in any market but worth noting now because although many stocks have made huge gains off the March lows, there are many that have underperformed. If you find these underperforming stocks, or stocks that are trading at imbalanced prices even in there over performance, you will find there are still great opportunities short term.
However, if you are in the market today, the question will repeat itself. As market makers and institutions shake down with their message- are you sure you don’t want to sell? be sure, or be right if that’s important to you. But, be on the right side of the trade and know the answer to this question before it presents itself again.