Not a bad reversal in two trading days. It was due. Overdue.
Even though the indicators that I watch have not been kind to me of late, sooner or later you get rewarded. Granted, I am still a little behind from my last entry point, but I wouldn't let the market scare me out of my position. Not in this volatility. I do think I have a good chance to tack on some more gains by Wednesday, but after that I'm not sure I want to stick around. I am not bullish longer term and so far this is just a sorely needed bounce.
This morning in my account talk I mentioned the 5 day Fully Long/Fully Short Ratio on Trader's Talk was close to a buy. Today should have clinched it. If I count last Friday as the first of 5 days then today was day 2. Wednesday is day 4 and day 5 is Friday, which I'm pretty sure will be a non-tradable day for us. Coupled with fact that we had dipped below the lower Bollinger Band last week it sure seemed like a rally was much more likely than a continued decline.
The good news for us is next week starts a new month and gives us another couple of trades. The 5 Day ratio just happens to expire Friday. Perfect.
Or is it? We can't be sure at this point. According to Ira Epstein we need to break 918 on the SPX chart to have a good chance at seeing an Intermediate Term rally. That's probably a pretty good indicator to use as confirmation, but this is the TSP we're trading. We can't move on a dime or always wait for confirmation (of course that depends on your trading style and what indicators you like to use). I don't use confirmation in this market much since I'm handcuffed by the trading restrictions and the volatility adds to the challenge. I prefer to go from a Short Term strategy to an Intermediate Term strategy in volatility like this. It's painful, but it can work very well if you can stand the heat. But again, it does depend on the indicators being used and what they are saying.
Tomorrow may see some selling. At least early on. I'm thinking they'll try to lull the bears back in and then punish them. Ira Epstein thinks we're set-up for a bull trap. I'm inclined to think it's the bears who need to be careful here. At least for the next couple of days. But tomorrow is another day and the indicators are largely fluid. I'm sticking to the game plan for now and hoping for a continued rally to sell in to. I'm still mindful of that Intermediate Term sell signal that the Seven Sentinels gave last week.
Even though the indicators that I watch have not been kind to me of late, sooner or later you get rewarded. Granted, I am still a little behind from my last entry point, but I wouldn't let the market scare me out of my position. Not in this volatility. I do think I have a good chance to tack on some more gains by Wednesday, but after that I'm not sure I want to stick around. I am not bullish longer term and so far this is just a sorely needed bounce.
This morning in my account talk I mentioned the 5 day Fully Long/Fully Short Ratio on Trader's Talk was close to a buy. Today should have clinched it. If I count last Friday as the first of 5 days then today was day 2. Wednesday is day 4 and day 5 is Friday, which I'm pretty sure will be a non-tradable day for us. Coupled with fact that we had dipped below the lower Bollinger Band last week it sure seemed like a rally was much more likely than a continued decline.
The good news for us is next week starts a new month and gives us another couple of trades. The 5 Day ratio just happens to expire Friday. Perfect.
Or is it? We can't be sure at this point. According to Ira Epstein we need to break 918 on the SPX chart to have a good chance at seeing an Intermediate Term rally. That's probably a pretty good indicator to use as confirmation, but this is the TSP we're trading. We can't move on a dime or always wait for confirmation (of course that depends on your trading style and what indicators you like to use). I don't use confirmation in this market much since I'm handcuffed by the trading restrictions and the volatility adds to the challenge. I prefer to go from a Short Term strategy to an Intermediate Term strategy in volatility like this. It's painful, but it can work very well if you can stand the heat. But again, it does depend on the indicators being used and what they are saying.
Tomorrow may see some selling. At least early on. I'm thinking they'll try to lull the bears back in and then punish them. Ira Epstein thinks we're set-up for a bull trap. I'm inclined to think it's the bears who need to be careful here. At least for the next couple of days. But tomorrow is another day and the indicators are largely fluid. I'm sticking to the game plan for now and hoping for a continued rally to sell in to. I'm still mindful of that Intermediate Term sell signal that the Seven Sentinels gave last week.
