Double Your Fun

Staying put in a leveraged trade is twice as hard when you are on the wrong side. They call leverage a double-edged sword for a reason. There are two ways to deal with the volatility; either get out, or look at the trade on a less frequent basis.

The CMI is built for the long haul so you have to be willing to give up some gains to trade with the best probabilities. A 4% move in the wrong direction multiplied by two hardly seems fair but the market is always right so the 'big picture' is the place to look.

I'm sure I have a biased view but my market instincts tells me that this large upward spike today, after filling the May 20th gap, is the C leg of an inverse A-B-C structure that would put the NASDAQ down around 2,100. Maybe it's a mirage, but I'll accentuate the positive...which happens to be a negative, directionally speaking. (I'll post my marked-up graph if this mirage grows legs).

While we're waiting for the swing, take a look at some of this cool artwork from Clark Little. Clark knows something about taking a beating. This nut stands in the shore break to get the right perspective. Witnessing these views in real life requires a willingness to endure the spin-cycle...and a note from your chiropractor.