Last three days, the market touched new low, and rallied sharply. S&P touched 1427 on Monday, and closed today at 1497. The recent high is 1555, what correction and turmoil we're talking about? Looks like all are well in wall street.
- I didn't follow my own advice to buy the dip on Monday and Tuesday, because I had IWM calls and SSO and UWM, I needed lot of nerve to just hold them through Monday's low, and again the 15 minutes dive after Fed yesterday.
- I put myself at a very difficult position, since I entered calls and ultra ETFs too early.
- Today I sold all IWM calls and SSO and UWM. The two ETFs are profitable, but the IWM, I think it's about even. Plus I sold my SPY calls at huge losses last week, if I hold to sell today, I can make money!
- But I was lucky to sell my IWM Aug 79 call at 1.71 and 1.57 today, on Monday, you can buy it at 0.3, and you can buy it at 0.4 yesterday! I had enough nerve to hold them through these moments, not too bad.
- If I waited, then I could not buy them early and could buy them last Friday and again this Monday. Entry is very important.
- Since it took market 2 weeks and tons of bad news to correct 8% in S&P from 1555 to 1427, and it only took it 3 days to erase more than half of the losses, I switch to bearish view.
- And I bought very small IWM puts today, when the market dived after 3PM, it's a 50% gainer, but I didn't sell. Last 20 minutes the Dow closed up 150 points! Can you say manipulation?
- We had this late buying last week on Wednesday and Thursday, to only crash to new low on Friday and again on Monday.
- I'll wait to add ultra short ETFs and puts if the market continue its V shape surge.
- Usually, the down side is faster than the upside, and that's the sign of bull market.
- Now the opposite is true. And if a rumor (GS's fund is in trouble) can move the Dow from up 180 to down 20 points within 30 minutes, that doesn't seem strong to me. Yes Dow recovered all and spring to close up 150 at the end.
- I think it's a trader's market again, it can go up and down 100 points on Dow on any day. So pick your spot carefully and take profit if you have one.
- This is the lesson I learned!
Next:
- I don't know how high this market can go, but I'll use the opportunity to add shorts again.
- Even the market is to resume the up trend, the low of 1450-1460 area is very likely to be tested, and even 1430 area can be retested before it can go any higher.
- So I expect the above case to be played out near term, likely before Aug.17th, which is option expiration week.
- But now the market is so strange and volatile, if you don't have enough nerve, you better sit on cash and watch, you can get burned easily!
3 comments:
Timing ten minute moves in either direction is impossible. What are you basing your buys and sells on? If you trade based on a gut feel the market will punish you severely. The market exists to take the most amount of money from the most amount of people in the shortest amount of time.
I don't see any logic to your trades.
I agree with your comment. That's how I got into big losses too, thinking I know where market goes and let profit turns into losses. I started to win most of the time when I think that I'm dumb and don't know market direction. Buy when market is oversold during the day and short when market is overbought. Also, always put stop market whenever making profit and move stop when profit increases; this way I won't let profit into loss again. My profit is small (sometimes big if lucky) but steady daily and accumulates.
Also, admit when making mistake and close position when loss is still small, before it turns into big loss.
It's very difficult as it requires good self-control and conquer greediness for bigger profit.
-ryan-
All my indicators are for short term trades, like a few days and weeks, I switched from long term trade to short term trades. Yes, 10 minutes moves are impossible to trade, but if it's something you planned, and it moves towards your target, then it's not a bad idea to get better entry or exit price. This is the area I like to improve.
In the end, how many days we have a movement of 1%? not that often. Now we have 1% movement in 20 minutes, that's something we need pay attention to if we're in a market like this.
Based on VIX, we may have this kind of market for a while.
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