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My first real experience of how it really helps a lot when I'm trading with the direction of the market. Positions that were opened on Tuesday were bleeding on Wednesday and Thursday's massacre made Wednesday bleeding felt like a shiatsu massage. It sure feels great after a painful massage!
There was a re-test of the long bar that I mentioned previously and it happened yesterday. And today, the market continue to drop more than 300 points to complete a 100% retracement of recent gains. 13500 should be a natural support and a double bottom of 7/11/2007's low. Dangers of going in long right now would be the foreseeable problem of further retracement to 13270 where the market should find support at triple bottom.
This year's second-half correction is almost over. I learned yesterday that this normally happens in August or October but I guess when everybody sees it coming, it's not going to happen as expected because just like last month's options expiration week, everyone was in anticipation of an up week and it was all over the news. And low and behold, the market makers were not morons and pushed the market down and even out all the favorable odds. But then again, with such high volatility in the market (VIX is now hitting 22, last year's high is 23.81) we could very well have yet another significant correction this coming October. Well, since I typed the above, the market went on and took a -430++ low of today's dive (13335 with VIX as high as 23.36). But nothing's changed other than one good opportunity to make money was not being exploited to its fullest potential. I did not make enough for such a big and wonderful move. But then again, it's always never enough.
I made one mistake that should take note of. I didn't turn on the bollinger bands otherwise I could have seen approximately where the DOW will bottom out today. It went towards the bottom band and then rebounded.
I forgot to mention that I have sold COH on Tuesday at $48.90 or so. It dropped to below $46 today. It's one of the position that I do not have options written on it. Thus everything else is making money today because of the downside movement. Except for SBUX, but then again, it's the wrong kind of short term stock to gamble on because of almost no volatility.
One last note, it is a really funny day to see all the charts go haywire. I didn't know electronics can get emotional as well~! If you followed the market live, you'll know what I'm talking about! |
