The 10 cent trade
A new Bear Market low was made again today.
Sounds like a broken record I know, but that ‘s the reality of the price action.
News moves the market these days.
Reminds me of my college days, when we would greet any kind of news with raising a can of beer in a toast.
When President-Elect Obama announced his appointment of Timothy Geithner as Secretary of the Treasury this afternoon, traders raised their can in a celebratory toast.
Markets soared, and the Bear Market is over.
Or so they would like us to think.
Is it possible, that the weekly shorts waited until the customary 2:30 to see if we would make new lows?
When the 40 area db held, shorts decided to take profits, and for good measure, the PPT goosed the buying?
Did the divergence on the $vix.x signal the beginning of a potential seasonal rally?
Being option expiration, did “they” decide to kill some put options?
Who knows. Sharp rallies are hallmarks of Bear Markets. They can come at any time, and need to be respected. If we get it right, as a day trader, we can make it coming and going.
Knowing the secret code allows us to be aware of these potential reversal areas, and accept our trailing stop outs. The reversal trade is always available, and if we have made significant profits, risking a few points for the contra trade is usually a low risk/high reward proposition.
Today’s late day breakout is welcome relief for a maket that has already put itself in the history books as one of the worst ever.
Bear Market over? Expert Kevin Haggerty’s sobering view is that we are in a secular Bear Market that will continue through 2018-2019.
I respect his opinion, so I continue to seek out strategies that will allow me to continue to play the swings.
Trader extraordinaire Jeff Cooper has said that “markets turn on a dime. Most traders can’t, that’s why they lose.”
Today’s 10 cent trade in the last hour is a great example of how lovers rather than fighters of markets can be extremely profitable traders.
I keep a dime on my trading desk to remind me that I am a lover.