Sell When You Can, Not When You Have To

I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday’s gap down it’s looking like that push higher may have been a head fake. We’re now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There’s a lot of talk about the dollar’s weakness being the cause of yesterday’s drop. I’ve already said how I feel about that, and I really don’t care what the reasons were. All I know is we’ve run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They’ll book those profits sooner or later and I’d rather look to jump back in on the long side after a bit of a dip.

Let me be very clear with what I’m saying. I’m pretty short-term focused — about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I’m trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I’m not calling a major top, just looking for the point where it makes sense for me to jump back in.