The markets had another dramatic turnaround today. Overnight they were up almost 5% . By the time the market opened they were up around 3.5% and when they closed the dow was down 200 pts. The globex is now open and the markets are off almost 1%. Whats remarkable to me is the federal reserve is saying nothing at all about this. Greenspan pulled out all stops just for a Y2K event that meant nothing. Bernanke made it clear he would print as much money as necessary to prevent a meltdown. But now we are having a stock market downswing with china cratering and not a word except for several fed reserve governors talking about a rate hike next week!
Now its just a question of seeing how all of this plays out. I did in 2008 and I will now. I put on the last part of my spy/sso trade at the close. So thats it for that trade. In the meantime about the only trading I will do now is my Mean Reversion swing trade in one stock or etf. Those I put on in 25,000 increments. As far as breakout long trades those are few and far between! I could of taken a few today but I do not take breakout trades when the market has a opening gap of over 1%. What happened today happens too often to risk trading breakouts.
On the plus side you got an idea how fast and dramatic a move to the upside can be. So if we get Yellen starting to talk about no rate hikes this year or quantitative easing(that is wishful thinking) that market will take off like a rocket.
Once you start these mean reversion trades the risk is you panic and get out at the bottom. I have gotten over even thinking about that. I have a plan and I stick to it. But then I am obsessive about position sizing and the amount of risk I take.
I will update in the morning. As of right now I have on only 7 positions to manage. See you in the morning:)
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Monday we went 0-2 on our MLB Plays losing with Phil +188 and Miami +144. It was looking like we might win with phil as they were leading 7-2 but again as in sundays 7-3 game that was short lived. Is the NFL regular season here yet:)
Tuesday MLB Plays
MLB Weightings for Tuesday:
965 HOU – D Keuchel
966 NYY – I Nova 1
953 SD – J Shields 1
954 WAS – S Strasburg
951 NYM – N Syndergaard
952 PHI – J Williams 2
967 LAA – J Weaver
968 DET – A Simon 0+
955 PIT – C Morton
956 MIA – B Hand 2
959 LAD – A Wood
960 CIN – J Lamb 3+
957 COL – C Bettis 0.5
958 ATL – M Foltynewicz
969 MIN – E Santana
970 TB – N Karns 0.5
979 MIL – W Peralta 1
980 CLE – J Tomlin
971 TOR – M Buehrle
972 TEX – D Holland 3+
973 BOS – W Miley
974 CHW – J Quintana 1
975 BAL – M Gonzalez 1
976 KC – D Duffy
961 STL – J Garcia 0
962 ARI – R RAY 0
977 OAK – J Chavez 3.5+
978 SEA – M Montgomery
963 CHC – J Arrieta 0
964 SF – M Cain 0
I will update swing trade and market comments tomorrow morning before the open.
Added final half of spy/sso at 52.90 …if your trading these you can buy it in 15 min after hours..most likely at a better price.
The markets are up around 3.25% in the globex this morning and have been up almost 5% at the highs. These market are treacherous right now and it is no place to be over extended. You could be right and be off on your timing and still lose money if your over extended. If you bailed at the lows do not beat yourself up. You were not alone I am sure. Just treat it as a lesson and move on. Learn from it.
I have have 7 swing trades to manage today and am not likely to trade anything new today. Typically large gaps up are not high percentage situations for taking breakout trades. The markets typically tend to consolidate or fill gaps as opposed to gap and go. As far as exiting positions today. If targets are met I will exit otherwise stay with the plan!
Expect more volatility. Although yesterday was about as volatile as I have seen it. Down 1100 to down 100 to down 600….gets you dizzy:) But it sure makes thing interesting. If you find yourself not sleeping at night or worrying about every movement in the market then sell at the open..take a break…and figure out what you are doing wrong. You should be losing no sleep and have 0 stress with trading…Period. If you have these then you are trading too high. Its that simple. If you know this and still trade too high then you have issues you need to deal with before trying to trade to make money…because until you do …you will go broke..and also its that simple.
Now you might ask…why do I preach about this rather then just give out my trades. The trades are minor compared to the advice.
The idea is to make money off the irrational behavior of others rather then the other way around.
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