An Inside Day – What Are The Implications?

An “Inside Day” ( thank you Investopedia ) – Is a trading day wherein the entire day’s price range for a given security,  falls within the price range of the previous day. An “Inside Day” can be very useful for spotting changes in the direction of a trend.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

Ill be looking for this kind of thing tomorrow ( actually I was thinking moreso today but….. ) as the selling pressure appears to have petered out. I think it’s pretty safe to say – the last of those bulls still clinging to their shares, will have most likely thrown in the towel here today – as seen by action in Apple (APPL) and tech in general.

“Capitulation” as we’ve come to know it in the trading world.

The “big boys” will most certainly be buying…as most of you (if not already)  – panic, and readily hand over your shares…. at significantly reduced prices.

Kong stands strong……..kong…long.

14 Responses

  1. kreks November 9, 2012 / 1:14 am

    What are you long, Kong? I started with some gold positions the last few days, and just now added GBP/USD (I like the look of the price near support, the BOE signals yesterday and decent economic reports).

    Next on the menu will be AUD if we can get some upside momentum going.

    • Forex Kong November 9, 2012 / 1:20 am


      GBP/USD certainly looks great here – nice work. I too will be placing orders a “touch” above the current market prices, and if indeed we get some movement tonight – I’ll get picked up too.

      I am also holding calls in GDX, SLV as well stock in both EXK and NUGT.

      I too will be entering same ol stuff (long commods against both USD and YEN) – with small orders throughout tonight / tomorrow – depending on dollar action. It’s got to roll over here any day.

      • schmederling November 9, 2012 / 2:01 am

        PM’s are really showing strength in the midst of a stronger DXY – this adds a positive footnote that we are headed in the right direction. Added to SLV calls today & was in and out if USLV for a quick trade 1hrs into open & out at 3pm. USLV can be very rewarding but can cut like a knife in a flash in & out for me on this one.

        I am looking to take some long awaited time away from the computer & market…. heading to warmer climate soon. Winter has arrived early in TO & some extra spending money coming into the last quarter with a very good change of ending the year well into the black is more the welcome.

        Let’s enjoy the moment ….

  2. hf November 9, 2012 / 9:57 am

    hello again Forex, I am wondering – with new money if you were buying here, would you prefer AAPL or GDX (or best to split 50 / 50)
    thanks !

    • Forex Kong November 9, 2012 / 12:22 pm


      Diversification is never a bad idea, and at this point – considering the significance of this low/turn, I would expect both tech and the PM’s to make some nice moves upward. I am deploying new money here today – and will actually be doing very much the same – only through “xlk options” as well possibley adding to my GDX calls.

      “XLK” is a much cheaper tech play – and if looking at the charts…more or less does the exact same thing as APPL…Im looking at the March 28´s at like….1.30 – thats a pretty cheap ride on APPLE

  3. Ben November 9, 2012 / 2:57 pm

    Kong speaks, I follow. Got in to a bit of AAPL derivatives yesterday around 547. These sellers are panicking more than normal, looking forward to capitulation day on tech. Up 35-40% going Kong style on GLD/GDX calls – thanks.

    • schmederling November 9, 2012 / 5:35 pm

      XLK looking good up almost 1.00 already on the day…

      • Forex Kong November 9, 2012 / 5:43 pm

        You bet Schmed – all trades really looking good here as of today. I guess I missed Apple / tech bottom by a couple hours early last night.

  4. Ben November 9, 2012 / 3:55 pm

    Stay inside now…just stay inside.

  5. Schmederling November 9, 2012 / 6:16 pm

    XLK… sold 1pm… everything…

    • Ben November 9, 2012 / 6:25 pm

      Nice gain, Schmederling. I’m trying to decide whether to get out also or see what happens in the next couple weeks.

      • Forex Kong November 9, 2012 / 6:43 pm

        Guys…..I squawk about a better understanding of the “macro” and the “longer term direction” in order to better analyze the shorter term.

        I guess I should “put up or shut up” to a certain degree. Now ( in my view ) is time to step on the gas – not a time to sit and wait. In fact…..Im thinking we move to new highs here before year end! – that kind of gas!

        This is based in the simple understanding of the dollar and its relationship to “risk related” assets. As the dollar falls ( which it is very very very set to do) all other boats shall rise! I will likely be long til mid January in general – and then initiate new plans to navigate the long topping process thru mid 2013…..and downwrd move in “risk” in the second half – and forever there after!

  6. hf November 9, 2012 / 9:05 pm

    bought some GDX March 55 calls @ 2.25 this afternoon.

    • Forex Kong November 9, 2012 / 9:07 pm

      Great entry at 2.25 If you ask me – fantastic!

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