Ben Bernanke kind of telegraphed this half point rate cut today that sent shorts scrambling to cover their already bloated profits for the year.
The travel range was established early, allowing for massive intra-day swings.
The misdirection premarket high kept longs salivating all day long for a double top, but in the end they were sent screaming in the last hour as the market broke key support.
The market may be searching for a bottom, but time will tell. Focusing on the signals and ignoring all the talking heads on TV is the best way to keep your sanity.
Follow an excerpt of a conversation with a fellow trader (FT).
FT: How did you know it was going to turn there? You were right on both sides today.
E: A pattern I have learned to interpret.
FT: I thought it was going to break it both times.
E: Me too.
FT: So did you take the trades?
E: Of course, why not?
FT: Because you could be wrong.
E: Anytime I place a trade I take a risk. I prefer to take a one or two point risk with a potential to make 25 to 50 points, and those were the logical places to do it.
FT: It’s scary, all this volatility.
E: Yes it is.
FT: I like it when markets are calm and gentle.
E: Then stop trading for now while the volatility is 50+
FT: If you had to suggest a mentor or two so I could learn, who would it be?
E: All the mentors in our resources are great, but you may want to start with Kevin Haggerty. Amazing teacher, nobody better in my opinion.