Wrong Side of The Tape

Raul3 Sat Mar 7, 2015 8:48am EST 2 Comments

I tend to favor the higher time frame trend when my overall context read is neutral. Thus when a neutral bias developed on the Nasdaq last week, I was still more apt to work longs instead of shorts. This was the case even on Friday aka I hit my daily loss limit.

The daily loss limit is a good idea. It’s like a seatbelt. You don’t want to depend on it but on days when you crash, it keeps you from dying.

I had the market in my sights. I know you guys don’t like talking about losers or missed trades but I have to air this one out dammit.

This was my thesis for the week, a bold synopsis of 8 hours of Weekly Strategy Session research boiled down for the executive types:

Bias score 3.18, Neutral. Look for signs of cash inflows early in the week as the new month starts. Be hesitant to chase any strength early in the week due to Wednesday afternoon’s Fed Beige Book and Friday’s Non-Farm Payroll data.

So I had the catalysts on my radar before the week even started. Then by Thursday I had a clear view of the footprints a large, influential trader was making on the market. Here is an except from Methodical Action, a blog piece written Thursday afternoon:

The path of the Nasdaq this week has the look of a master at work. I think back to trading legends and how they make the bulk of their money at inflection points. Someone deep pocketed is making an earnest attempt to influence the market.

My catalyst was in place, a higher time frame seller was already on my radar, and the obvious “Strong Labor Markets Reverse Early Index Gains” play was triggered.

Hitting my daily loss limit doesn’t devastate me, though it does sting. What burns way more was the huge missed opportunity. I work too hard to miss these delicatessens. LET IT BE KNOWN HENCEFORTH—I will ride the next sweet inflection point down like a tan bae on skis.