I agree. I did buy some OEX puts at the close on friday to hedge the gains in long calls. I can't give you a percentage but I have a rule of thumb that works most of the time. On expiration friday near the close get short or at least long some puts. All the stock that the arbs have bought on thursday and friday to cover positions, will be coming back into the market on monday and depressing it to some extent. Obviously today was exceptional circumstances but check it out next month if you're interested.
There was a post by some one tonight about a creeper market. It's a perfect illustration of what we had today. I can't recall who posted it and in what subject. I don't have time to look now, but a search would be worthwhile. Brandon
Me. --Db It's called "creep". In a downtrend, if the trend is reasonably strong, the price should not retrace enough to penetrate the last reaction low, or, if it does, it should retreat immediately and resume the downtrend. When it penetrates the last reaction low and means it, you wind up with a very gradual trend, even with an occasional higher high. This encourages you to widen your stops so that you don't get caught by these retracements, at which point, of course, there is an unexpected rally and you get taken out for even more than you would have if you had just left it alone. To weather creep, you have to get in early in the trend and just leave it alone. This is very difficult for most traders to do because there's so little "action". --Db
I agree. The down days suck. I have a few strategies that work on bouncing days, but when it is on direction all day long I cant trade. I made some money on the run up to war, because it was pretty much a sure thing that the market would be getting lower closer to war, but now it is unclear. Oh, the mother of all uncertainties.
Thanks for reposting. It was an excellent post. I think that a lot of guys look at the action at the end of the day today and feel like idiots, when really they should not. Unless you get in right away on the creeper days, as you said, you really dont get too much for low risk entries the rest of the day. For that today did provide a good signal, but most of the time you don't get that. Brandon
300 points down on barely 1.3 billion shares. That just says no real sellers and soon it's going back to sector rotation by money managers. That should translate into momentum.
Sharing with the crowd. Today was actually not that bad. Flat consolidation with more Flat Consolidation...at least you know where the second half of the move is going when it breaks out. Good for 20pts+ in the Nq e-mini. at anyrate, here is something that I was reading just yestd. evening. In a book I purchased on another traders recommendation. Funny thing, the pattern developed today.... I'll attach the chart on the next post. -momo
when I was holding short in the F.C. period, then the bottom dropped out I was more able to of course clearly see the pattern and was able to cover my short and go long right at the bottom(w/ str. 1046 trendline support), with an expected short and sharp climb to complete w.4 w.5 down I didn't expect to see come to reality at the end of market today. However, it will either be a leg down or protracted. Not a prediction, just what the theory is stating. Good luck to all tomorrow. -momo
Silk... I love to complain Suck it up mon ami. $2MM (so they say) tells me the above didn't get you where you are. The only trade today was to Arb the open and sell stocks that didn't open low enough Oh, was it now? Well, there's a play I'll glady take the other side of. trader99... it's not complaining. It's stating the facts. The only fact is the market opened, made a high, made a low and closed. All else is perception. (See above for an example.) dbphoenix... When it penetrates the last reaction low and means it, you wind up with a very gradual trend, even with an occasional higher high. What! Did someone forget to read the rule book or what? A higher high in a downtrend? Outrageous! Don't they know the fate of the world rests on that five minute chart! How dare they!
Another good reason to switch to futures. There's money to be made in ES 95% of the trading days. Even in those quieter after 11:00 hours.