Years ago, while traveling in Mexico, I visited a cave. What alarmed me was that there were no protective barriers of any kind. In the litigious United States, there would at least be a chain-rope along the edge of the precipice, as a security blanket, if nothing else. But in Mexico, you were on your own.
It occurred to me this morning that this is probably why I like trendlines and retracement levels so much. (And, as an aside, I apologize again that I must "hide" my chart's retracement levels; 2sweeties was more than happy for me to include them in my charts, but I guess some subscribers kept whinging at him about this, so I suppress them to shut them up.) These lines are my guideposts – – and sometimes a security blanket – – for my decisions and my trading.
They've certainly been vital lately. Tuesday and today have both been dynamite. I've trimmed some of my really fat, profitable positions, including FXP and OIH (long and short, respectively), and I cut my wonderful STRA put position in half. At this point, having closed out /ES at 810, I have a fresh (but smaller – 10 contracts) short position on /ES at 821 with a stop set above 826.
As that red trendline indicates, a break beneath today's low so far of 808.25 would amp-up the bear case even more.
