The bull climbs the stair and the bear jumps out the window.
The market nose-dived and never looked back, with one slight twist.
It hit a low last night, with a one point lower low, then printed all the way back up to the gap fill + one. 67.25 was our call for short stop at the gap fill. I was not interested in the long side today.
The sell-off and bounce back to the 63 was a move of sheer brilliance, freezing both the conservative shorts and catching the aggressive longs.
Today’s subsequent trade was all about how much risk you were willing to assume to get into a position short if you missed that trade.
Because the bear jumps, you will not get a clean entry if you miss the right one. (The one that comes to you.)
Focus on that thought, and grasp the significance compared with the bull side.
If you step out of the stream, you also have the same dilemma; how do you get in and manage risk at successively lower lows?
The Emini Wizard trading system allows for this kind of trade, based on aggressive and conservative entries.
The agressve trade was called for 59.5, as resistance. The 63 we called as the back up resistance. You can take the stop out on the first trade, and take the second, or average in one time with both.
When 51 got busted, the rules of the game changed, and if you understand how markets work, there was no safe long.
Some may work, but none was safe.
That’s why it was easier to short bounces rather than guess lows for bounces.
Yesterday we said that 76 was significant resistance. If your belief system accepted that reality, a few put options paid off handsomely today.
Most market professionals have trouble with a day like today. The normal numbers will not work; visually referencing the charts is essential to trade a day like today well.