Ford (F) Changes Direction 11/18/12

I was pretty upbeat on Ford (F) a couple of posts back. I feel obliged to post this and note the change in direction for F and the down arrow that has come up. I still see that the blue trend line I have drawn touching the past lows has not been violated, and the up trend could still survive. Yes – I went long and took half my position out when it started pulling back and closed out the entire position when the down arrow came along. I have pointed out before that I will theorize as to what is happening and sometimes hope; but will not permit such thoughts to cloud my judgment regarding whether to be in a stock or not when my system drops a down arrow on me!

A Down arrow or an exit signal is like Pavlov’s bell ringing to me, and I am the dog. No way that I will sit on a stock and hope it will go up with a down arrow saying it is now tilted towards the downward direction. Staying past your welcome is how people get burned in the stock trading business. Just take a look at the chart on AMD. It is now at a sorry $1.86 after being as high as $7.00 a few months back. There were plenty of down arrows indicating get out.

Gold (GLD) has been down as well and I am currently not in GLD. I will be the first to jump back in when the signal changes to an up signal however! I have also exited major portions of my long position in my 401K and in the last couple of weeks, made a little money on my SPY put positions on the down side. But the charts are pretty oversold and I am expecting a bounce on some good news. Better to close out some of my puts at a profit. I am using the down signals on SPY as my master switch to bias me up or down. Right now the bias is definitely down. The fiscal cliff is the key excuse, along with EU Union going back into a second recession. I certainly would be very surprised if those politicians agreed and compromised on anything! But surprises do happen and that would make the markets joyous for the moment in that the uncertainty would be removed. More likely is a long drawn out protracted process while the market sheds some more value. The drop so far has been  quite orderly. No signs of panic yet.

Pls note that the AMD system chart above shows large and small arrows. Large arrows are overall trend direction. The small arrows are meant to provide guidance within the large arrows - trade only in the direction of the larger arrows.