Well what a day. Nice bearish candle on the daily showing more selling pressures coming into the place. We broke out 3 day up trend line in the last 30 minutes on STRONG volume. Volume is finally picking up so we should get a move to the downside soon.
Shame on me
As the title of todays post, timing is everything and I timed it very wrong. Emotions came back into my trading yesterday which is the worst that can happen to a technical trader. I had exited my SDS at break even yet I still managed to incurr quite a few losses with other trades. I had very valid reasons for exiting, strong volume on the morning recovery, strong volume as we broke for a new high in the afternoon - 2 day strong up trend.
After exiting my SDS in the morning hours I tried again for a day trade as we made a new high. The run down towards 851 looked promising and I kept my short just to get taken out again as we made new highs. The 5-min candles yesterday as we rallied off the 851 looked weak at first just to come in strong on the second round.
As a result of my emotional frustrations I had experienced the past 2 days I had no choice but to stop pushing the buy/sell button - I had no choice after pulling up my P/L. Reviewing my past 2 days, my P/L report shows utter trading disarray after we had broken my 38% retracement on Tuesday. Large SDS position $0, many (way too many) attempts at trading all with losses.
Let my P/L speak for itself. I am still up the month but 2 days had taken out 2 weeks of work - instead of adding to my bottom line.
There are 2 important trade lessons on my blog, sticking to your system and over trading. I broke both of them in the last 2 days. The last time this had occurred was in early February and I have trade rules that I have implemented over time to prevent me from this occurring. Those rules are there for a reason and violating them will have severe consequences as you can clearly see above. So let me forget about the past month and start fresh from zero today as it were the first day trading for me after a long break.Well, self criticism is a good thing I suppose ...
Today
Ok, lets try to take what occurred yesterday and apply it today. The strong volume sell off will put some sense into the bulls for once. Dropping this strong on much higher then usual volume set the mood for things to come. We have crossed MACD on the daily for the first time, this by itself is the final confirmation we need for a new trend to come.
I do expect another run towards the 851 today, possibly a last test at the 856 but this could be over right off the open. I will try to post up scenarios in the comments at the open to determine where it will lead us today.
samamehta, thanks again for the link. I just read it and it pretty much hit the nail on the head with what occurred with me the past 2 days. Not only did I let my stops get run, I kept on re-attempting to short with wider stops, increased leverage ... you know the story and you know how it goes. Lets review my P/L again in the next 2 weeks to see if I really know how to manage difficult "emotional" times.
ReplyDeletelook for support at the 835 levels today. Not sure we will see much of a bounce but it should retrace slightly to possibly 842 again. If we remain below 842 on the bounce we should be seeing a test at 828 in the very near term.
ReplyDeleteNOTE: The Dollar and Bond Yields are coming under duress ... something may be brewing that could have repercussions on the stock market. It has not happened yet, but there are clouds on the horizon relative to spreads right now
ReplyDeleteA leading sign for market decline?
Transport index against big resistence. Chris, do you know of any ETF for that index short and long? The market is full of suspense today.
ReplyDeleteDow Transport ETF = IYT
ReplyDeleteThanks George
ReplyDeleteI attempted another short today that got stopped out (again). Will give it one more try if we reach tuesday's top.
ReplyDeleteChris, it looks like yoyr upper target of 856 may be in play. 20EMA just cross the 50 EMA moving up. what do you think?
ReplyDeleteDo not think it will break 852. 852 should be the high today. Of course only if we get there and do not turn before then. The lack of liquidity is quite a bit concerning, we have volume in condensed areas here, it is very difficult to try to catch it since a turn for 2+ points can happen within 1-2 minutes.
ReplyDeleteI will start scaling at 847 until I am full in position by 851 with stop at 853 (yeap tight).
Do you always refer to Es or SPY or SPX when you print the number? Jus a clarification. Thanks
ReplyDeleteI use spy a lot, but always translate to public S&P. Same with ES, knowing points offset. I figure everyone knows S&P500 while some know spy/es as well. Just trying to find the lowest common denominator ;P
ReplyDeleteThanks Chris. SPX it is then.
ReplyDeleteok getting ready to pick my entry here. either happens in 15 minutes or I am leaving this one for another day.
ReplyDeleteI got in FAS 7.60 for a quick trade with tight stop still keeping shorts
ReplyDeletelooking like it may want to go higher here. 5 more minutes to drop or I will most likely close out.
ReplyDeleteMy TZA and TWM are doing OK i.e. up. SRS and FAZ are not holding so is FAS? what is going on
ReplyDelete850.14 =) lets make sure it holds up as the high here. Need one more push down to 845 before the short is all clear ....
ReplyDeletethanks for the comments today chris, george, & samamehta.
ReplyDeletechris your support prediction of 835 was on the mark...i can understand if the support was 826-828 because thats the bottom of the lower channel (on 3month daily) but not sure how you pin pointed the 835?...well done!!
great call chris
ReplyDeletethe chart I had posted a few days ago had all support/resistance numbers on there that I use. 835 was very close to lower trendline (keep in mind that lower trendline will keep on moving up in price as time passes)
ReplyDeletethanks for clarifying it,appreciated.
ReplyDelete