In defense of all who missed Tuesday’s move… I have been in that camp many times over the years.
Perplexed at how to avoid the dilemma of entering a falling market, we are given several choices: sell, buy, stand aside.
Buying a falling knife is out of the question for me. That is why I was unequivical: “buying is not for me today”.
That singular reference told you my feeling was that we were in a strong trend day. I don’t try to get cute and guess bottoms, unless they belong to an attractive movie star.
I ride the trend, or stand aside.
Most professionals hate a day like today. It is too uncharacteristic. It cannot be reasonably understood. Our perception of reality is totally messed up, so we are like a deer in headlights.
I have classified some 25+ trades for our members . These basic patterns repeat over and over.
This today was, as Jeff Cooper calls it, Kaiser Soze.
A rabid dog day, a David’s slingshot trade.
“How can the most players be cofused?” we continue to ask ourselves. By taking the long way home, as we have said so many times.
Perspective was articulated for members with recent commentary suggesting strongly that we were in need of a pullback, primarily because we have risen 375 points off the bottom. September and October usually are the weakest months, with awful selling pressure.
This is not an exact science, it is more art to trade well.
Simple , yes; Easy, no.
I am as astounded as you are that they filled the gap at 27.5 first before dumping… but the reality is that sometimes you need second entry to gain your toelhold. Go to the sidelines, think clearly about risk and reward, and then pull the tigger. Think of the trapped traders, and sense their urgency to get out.
The magical first hour was overshadowed by the Kings and Queens. Not normal for the reversal, that’s why it was so difficult to play.
“Don’t be late and short at eight”… correct entry was the bounce back to 10 bop at 24.5, so theoretically we are shooting for the 23.75 to 25.5 entry, if we believed in the trade.
Keep your wits when everyone around you is scurrying about. Focus on finding the rhythm, and subsequent targets.