Let me show you a minute-bar chart to illustrate a point:
The /ES spent ten calender days meandering around a 25-point range, chewing bears and bulls into hamburger.
It took the same instrument 90 minutes to slice down over 25 points. This morning's pop must have been one of the cruelest fake-outs for the bulls in a long time. It was exciting to watch.
What do we do now? Well, since I've been punched in the face non-stop for about five months, I've got a skosh of cautioness, as you might guess. This morning, I didn't have a penny of buying power left, since I was 100% deployed into shorts.
Having closed out a series of ultra-bearish ETFs, I've got a pretty good wad of cash again. I've gone long some /ES for the evening (the same kind of "insurance plan" I did multiple times today, all for naught, but important nonetheless). I would get a lot more excited shorting this market with a retracement to anywhere above 1010.
Both today and yesterday were quite good, and back-to-back they felt terrific. I think my shorts are wonderfully positioned for a sustained downturn, and I shall keep tightening stops along the way. In the meantime, I hope to make some large swing profits by moving into and out of ETFs at risk/reward levels that I think are judicious.
Mercifully, my regular trading accounts still have the good grace to permit me to trade the instruments I choose (unlike, cough, cough, Principal).
Good night, Slopers!