Thursday, March 4, 2010

Short - Biggest Trade Since Nov 09

As some of you remember I had minimized my trading capital by a large amount and been using a much smaller amount for my trades since November 2009 due to my 2009 losses.

Well today I made a slight adjustment, I went short at the close with a fairly large amount via ES futures and SPY puts. This is the largest trade for me since November 2009. I am treating this as a special case here due to charts, patterns and probabilities. Risk/reward was very favorable at this range and I could not resist so to speak.


  1. Good luck to the both of us. Still holding onto mine and didn't add to it just yet.

  2. Just a quick update. Added to shorts here and have last chunk ready at 1126.75.

    Total of 4 stops in place, 2 limit and 2 mental. All starting at ES 1131.

    Puts will have mental stop above 1133 and will only be micromanaged for exit if we break above.

  3. ok now its just wait and see. On one hand I am excited as we have the potential to make some real money, on the other hand, a bit "scared" as I am hoping this does not end up like another 2009 trade =)

    After I had missed the first drop I had told myself that if we ever get back towards the 1130 that I will be short. Here I am. We have quite a few charts and divergences that are strongly suggesting we are running out of steam. Now this could be the calm before the next big run up, I am not ignoring this and if we make a move higher I have to admit we should come in with strong volume and probably get back towards our old SPX highs within a matter of 2 days at most, probably less.

    So good luck to all of us that are short =)

  4. well... this thing ain't coming down....

  5. nope, will not see much of a sell off today, we may even add a few more points into the close. Typical stepping day so highest probability is a close above 1130 but below HOD, next most probable is another +5 pts to close in the mid to high 113X.

    Sell off is the lowest probability setup for today. Bullish monday on top of that so we could see another push higher over the weekend. NQ about to make a new high, just a few pts away. 50% of my futures stopped out, still in the puts and leaving the other futures as they are for now. Whats done is done =) Now just a matter of minimizing damages.

  6. I don't know about you guys, but I don't know how to trade this market anymore. I cannot trade against my views on the market and TA doesn't really work anymore these days. So I'll be on the sidelines watching for a while Been punished enough as of late. Good luck to all bears.

  7. trust me its the same here. You are not alone, I do not know a single person that is able to properly profit from this market anymore.

    Yes for a day trader, 3-4 pts type of trades you can always make money. But I never enjoyed that type of trading .... its back to my small capital now and also back to very short term trading. 10 pts max and get out before the day is over. Seems to be the only thing that works.

    As you said, the market is almost trying to trick you and make you throw out your "old" standards. I mean the 1092 was a perfect example (got screwed myself there). Break 1092 last week making you believe we finally heading for next lower support and then reverse it strong - so now a low risk/reward trade (from 1092 towards 1120) now turned into a high risk trade as it rallied back towards 1096 since you now had to assume a 10+ risk from that level.

    I would not be surprised if we find ourselves below 1118 again on monday afternoon. This market seems to want to try to make you believe a "typical" technial pattern will play out and use then make price behave in a way that would invalidate such pattern but only at the maximum pain point.

  8. consider this, I had a total of 2 trades both with perfect long entries at 1092 and 1093.25 - both of them up over 10 points at one point but final target was 1124.

    We break the range, go lower, go back up to 1096 - as a result of this was not able to take this trade again. Its just one example, same as the last few days, I had great entries short at the top of the range, just to close them out break even, small 3 pt gain OR in the last case with some real losses (bigger money trade).

  9. I'm letting emotions get to me now. When I bought SH, I put a mental stop of 1115 SPX but I didn't want to take a loss so now I'm incurring even more losing. What I'm curious about is that since it's 1x inverse etf, shouldn't it not really suffer from decay unless I hold it for a long time (years)? For example when SPX was 1150, SH was 50.84 and when SPX was at 1139 today, SH was at 50.91? Can anyone explain? BTW I'm still willing to hold a bit longer, it hurts a lot but I'm going to see if it's a double top.

  10. Ryan, it still carries an expense ratio. So yeah SH is probably one of the best longer term ETFs due to no leverage. I do not know the exact details on SH but think about it, nothing comes free lol.

    Why not just short SPY?

  11. Well German, what can I say... I feel your pain, another good technical setup another awful beat down.
    We've seen some craziness of late but today took it to a whole new level. A better than expected jobless figure? Really! I just don't get it. what's the total unemployed now? Like 16/17 MILLION. Today We had a 15 point rally cheering 36k like that is signaling some sort of "turn". What a joke!

  12. how u feeling? tried calling you but no answer. But yeah, its quite a beat down for the bears. Yes I Know numbers were better then expected but recovery needs to happen with new jobs, not less bad.

    Now today, we saw quite a bit more volume for the week but still not the levels I was looking for - a strong break above 1130 indicates new highs from a purely long term technical perspective but I am not seeing big buying.

    Oh well, another day over, yet again all the action happened pre-market and by 10:30 it was all over again. Not even any 3:00 action today.

    Back to the drawing board again for me now, not sure what to make of it. Though you have to admit, if anyone wants to throw a curveball into any chart its this. And for us poor bears, its just another 15 pts to the next resistance level.

  13. Have no charger for my BB but you can get me on my other number. Feeling better today thanks should be all good by tomorrow fingers crossed.

    Yes more of the action packed 15/30 minute spells we have been seeing. Well "the greatest amount of money is made in the market by the smallest number of people in the shortest space of time". This could well hold true as there wont be any bears left at the next resistance level!

  14. Hey,, guys went through all of the same experience. went short 24,34,38.5 hoping four points retrace out of 15 will make me break even. But not today. Mkt gave only 2 points. 38.5 to 36.5 at EOD. when you play safe with stops, you miss big moves, when you are aggressive, it goes wrong way as if mkt is playing you only.

    still think, next week is big opportunity to make money on short side. The only trick will be we do not take profit too quickly.

    I heard 975 by mid april. Go bears. will have a courage to short, if mkt goes to 1150 or 1120? hope so.