Can you mentally handle 500 pt daily swings in the dow? Not many traders can!

The stock market is down almost 100 pts an hour before the open. That is nothing, compared to what we have been seeing.

In addition, ES is about 20 pts off its overnight lows. Not an environment to be fooling around in. Many futures brokers have tripled their margins on the index futures now.

Also if you’re a volatility trader, trading XIV. You were in for a surprise. The sponsor of the ETF decided after the close that it was going to liquidate the contract. With no warning, they cashed out and liquidated sending the price from 80 to 8 a share. Credit Suisse is quite the bank. Costing many trades millions because they did not want to risk the volatility exposure.

I imagine there will be some class actions arising out of this.

But it goes to show that you need to be careful in these ETFs that are 3x leverage and there only for people to trade volatility.

I have a 3/4 position in SSO and also a position in NTAP. Typically a +560 up day would trigger an exit signal:)  But, we were so oversold I am still a bit away from an exit signal. However, a reversal today to the upside would most likely get me out of the trades. Then its just a question of deciding whether to exit on the close or the open tomorrow.

Also, it looks like no shutdown. However, it will be another short-term spending bill. I suspect we get a rally off the spending agreement when it is final, but we will see.

I have a trade I most likely will put on after the open. It’s a mean reversion trade but not the typical ones I trade. They do not come along very often. I will post it on my private twitter feed @rickjswings

If you want my views on the political environment and how it is affecting the stock market, just read the last few posts in this section.

Of note, the U.S. Dollar and TLT are positive while everything else is in the red.

If you want to follow some of my trades along with my thoughts typically given after the open you can go to @rickjswings. Typically I talk about the overall day expected with the markets and also give some levels on the ES and NQ for failed breakout scalping.

It’s my private twitter feed for the stock market and its free. Sports Handicapping is the subscription-based part of this site. But considering the cost of joining it’s almost free:)

Good Luck Today


RickJ’s Handicapping Picks

Skype: riccja

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