Wednesday, December 12th Recap
Today’s action caught me off guard right off the open - the gap up to 144 was something I thought was going to get faded and make things extremely hard for the bulls, leading me to open a few long weekly SPY puts to hedge my long MNST monthly calls. Off the bat, I was sure we’d break 143.80. After about 20-30 minutes when we didn’t break down, the bulls took the reigns and off we went. As a day trader this is when you have to be on your game at all times, and be prepared for whatever the market brings you. Coming in, I had a few stocks that I was sure were going lower if the market took it down (AAPL, PCLN, AZO), and on the flip side, if the market rose, I had a list of stocks I was prepared to see go higher. On a dime I went from net 'short', to net long. Opening positions in NFLX, and then re-adding later in the day.
The end of the day saw a huge sell-off thanks to Big Ben. It’s getting very annoying that we can’t have a few days of continuity without outside noise, but, such is life. I didn’t flip short in the afternoon as many traders did, but it was a rough afternoon for the weaker stocks out there. In times like these it’s imperative to find your leaders and laggards, and trade YOUR setups.
On the SPY daily chart we still remain bullish, but the good book tells us that closing on its lows will not be good for short-term prices. Coupled with the fact that we are extended and reaching “over-bought” levels, I think a controlled digestion is in our best interest. A test of 143 is imminent, and it is important to watch these key support levels to see if bullish sentiment is still hanging around. When we start reaching these over-bought levels it is very important to trim some of your longs and reposition yourself, it’s not a time to “go all in” or anything like that. There are a lot of sloppy charts out there, trade only the high probability ones.
The end of the day saw a huge sell-off thanks to Big Ben. It’s getting very annoying that we can’t have a few days of continuity without outside noise, but, such is life. I didn’t flip short in the afternoon as many traders did, but it was a rough afternoon for the weaker stocks out there. In times like these it’s imperative to find your leaders and laggards, and trade YOUR setups.
On the SPY daily chart we still remain bullish, but the good book tells us that closing on its lows will not be good for short-term prices. Coupled with the fact that we are extended and reaching “over-bought” levels, I think a controlled digestion is in our best interest. A test of 143 is imminent, and it is important to watch these key support levels to see if bullish sentiment is still hanging around. When we start reaching these over-bought levels it is very important to trim some of your longs and reposition yourself, it’s not a time to “go all in” or anything like that. There are a lot of sloppy charts out there, trade only the high probability ones.