Institutions Attack Trade The Trend Traders
Institutional stock traders have targeted trade the trend traders like us. With cold, evil, rage, Institutional stock traders are selling into the up swings and covering shorts into the down swings to compact the swing range too narrow for the majority of us to make money in. This has formed head fakes both to the upside and to the downside over the past few days.
Something that has scared bears like myself is that an official higher low is now in place with verification today.
As I talked about last week, the life cycle of the previous downtrend channel has come to an end. We are now in no-man’s nation while a different channel is forming. We do not have adequate information yet to determine if we are moving into a sideways trading channel, or an uptrend channel.
While there is no apparent trend, then what must trade the trend traders do? Move to the sidelines and the security of cash.
At present we have been in cash twice over the previous couple of weeks and while we thought a new trend had been recognized making us jump back in, it turns out we were head faked and slaughtered. I don’t know about you but I’m weary of getting my butt kicked by the better prepared and armed Institutional traders.
Someday we may have a Investors Bill Of Rights where the battlefield is made non-discriminatory, but for the present, inequalities continue to exist between institutional and amateur traders such as Institutional traders have access to all limit orders, they go to lunch with market makers and can make non-open market trades, they have access to a faster stock data feed and can use high frequency trading schemes against us, and they use the news organizations to manipulate public opinion about a corporation or the economy as a whole.
What is also key is that on the daily chart of SPY, bulls have re-taken the 50 day moving average although we still want verification of the break.
- Image via Wikipedia
The blunder I made was leaping back in this market twice now and being incorrect both times. This implies that I should raise the bar for what I consider to be a new trend forming. That suggests that I ought to find more bullish or bearish indicators on the charts of stocks than I have in the past. Even a Bearish Head and Shoulders Top and a Burial Cross was not sufficient to bet my money on the short side. Not even a Bullish Downtrend Channel break was adequate to bet my money on the long side. Each and every one of these technical indicators have meant nothing over the last several weeks. The only thing that these technical indicators have done is to draw us trade the trend traders from off the sidelines and into an ambush where we have been murdered by the thousands.
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