Over the past week, I have noted the emergence of a wide and choppy trading channel in the S&P 500. With today’s huge gap down, we are testing the lower end of that range. 1040 is a huge level, going back at least six months. I would imagine many stop losses will be triggered should be blow through it, despite the fact that we are becoming oversold again.
While there is certainly a distinct fear and pessimism in the air again, trading based on sentiment can be a tricky and highly subjective game. Instead of getting caught up in the emotion, keep this chart in mind as to whether we are truly seeing a major breakdown here. It is a zoomed in up to date daily chart of the S&P 500.
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I went back to 100% cash early this morning in an attempt to take some quick profits on my hedges, and to not let my longs get too far away from me should the market continue lower (it did). Needless to say, this type of market has been brutal for swing traders. I am leaning more towards buying potential support plays than anything else, but I am in no rush to be a hero.
My main focus is still on preserving capital until the market becomes healthy again.
Thanks for the update. Why not let your hedges run while selling your longs?
Rather start with a clean slate again–I had a feeling The PPT would be oversold soon and I didnt want to get caught with just short/hedges instruments.
I did it more so to just clear my head and to try and stay as objective as possible.
It was a good plan to dump your remaining longs this morning, I gave up on it a week ago when that basing above the 200 failed.
Right–keep in mind though I was hedged with leverage, and still had a huge cash position. So, while I probably held on a little too long, I was cushioned.
This break of 1040 feels like a bear trap. But. I will let it develop into the bell and tomorrow morning before acting.
I still have 22% left in mostly gold plays(Jake ideas of course) and some NG.
I think you played it well, tomorrow should be interesting.
I should have sold all my APKT yesterday I kept a small amount and sold the rest this morning for a loss. But I was hedged with my short oil and I’m still up for the day and for my 10th straight day trading. I’m in 60 percent cash and will start widling away at SCO. I’m mad at myself for not selling all of my APKT. I had my 8 percent profit in two weeks with it and looked for more. This market is a fast trade market and you have to take your gains quickly. Fundementals don’t even count for companies actually making profits and beating expectations. Last year the trend was up more days than down and was easier to play. It looks like the reverse has happened looking at the charts.
exactly—buy the dips, short the rips is the way to play this market–even though it is not my style. I am either going to have to adjust or sit in all cash again. Dont sweat it on APKT, youre doing great. but yeah, ya gotta take profits quick in this market.