Pardon my pessimistic view; but I believe, today, we are only entering into the “eye of the storm” for the moment.
The woe of Greece is far from over; and we have yet to feel its domino effect that will impact Spain, Italy, and the rest of the financial systems around the globe. Again, the G man may under-estimate the ramification of Greece failure the way they under-estimated the failure of Lehman Brothers. Suffice it to say that defensive strategy must be planned ahead such that it can be executed in a moment notice. If you are overloaded in illiquid position; hedging plan will be your protective shield.
For trading strategy, I will place a buy stop above each SKF daily high. In other words, if SKF continues to have a lower low and lower high, I will move my buy stop to each day high. In any event when a surprise news hit the news feed and SKF shoots up; I will get fill and be long SKF even if I’m not looking (or too slow to react).
Also, I may buy some JPM put option giving their current portfolio predicament .
But then again, I may be overly-pessimistic. Nevertheless, being prepared for the worst case scenario can never be overstated under current financial climax.
Good Hunting!
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Like the SKF strategy, makes sense. Overall I just expect more than usual up/down volatility as more emotions seem to come into play during times like these.
I believe we are beyond volatility based on emotion; we are at the cusp of Greece default. Banking crisis, as we have seen in 2008, transcends human emotion. We are dealing with an issue that can have an impediment to the working mechanism of our society.
I really enjoyed this chart from @HCPG & this is the environment I am looking for as it incorporates some of that Europe/Greece debacle & how trading was http://highchartpatterns.blogspot.com/2011/09/how-not-to-trade.html
Interesting chart and annotation. Notice that SPY was trading at 116 area which was far below current 130ish. Also, Greece did not default or opted out of the Euro zone last year. This time, it is a whole different ball game.
Again, I can be totally wrong and everything will be ok; but preparing for the worst case scenario that may not happen help me keep a calm mind if it does happen.
Right, plan/prepare is all that one can do. I hate news driven markets
Place a buy stop at $50.74 which was a bit above yesterday high.
Move buy stop to $48.88 which is a bit over today high.
Long SKF based on intra-day breakout to the upside. Stop at $47.67
Short JPM with July 35 Put Option
Covered my JPM puts to lock in profit.
SKF buy stop @ $48.88 filled. Position size increased.
Will add to position tomorrow if trend continues up.
I move my SKF protective stop to 48.07. This is a bit below mid-point of yesterday bar.
Above is my diary of my trade for personal log only; they are NOT advice.
Moved my SKF stop to breakeven.
Added more SKF since it took out intra-day high. Moved stop to breakeven.
Moved SKF protective stop to a bit below intra-day low.
Added a bit more SKF since it took out intra-day high. Protective stop is still at a bit below today intra-day low.
Above is diary log only; not advice.
Trading journal update:
Move SKF protective stop to the next intra-day higher pivot low (in the low $49ish).
Stopped out and locked in profit.