Crap, I did a small EOD short. But all this talk has me convinced we rally in financials this week because too many think "it can't continue." I'll probably look for near BE bail from the trade. Bummer.
Easy there. The thing has a history of filling gaps. Big gaps, small gaps. A gaps a gap. If it's not then you're gonna need to toss in 10 other variables. Where's it in relation to MA's (and other S&R), how big is the gap, what's the basis behind the gap, hell even what cycle it's in can matter. If we're using a plain vanilla strategy this thing's gonna get filled. Where's the stop? Tiny...give it 1-2% and if you lose, you lose.
Dear Trading Gods, Thank YOU for letting me short financials today!! I promise to sacrifice a nice fat pig if you let me profit handsomely from this trade. Sincerely, Shortie
don't have the guts to wait for the gap to fill. took easy money from yesterday's short and i am out.
KISS. I got stopped out tho today. Still short some other junk. You can't over-think trading. Period. Money management is the key and never look back.
So, XLF keeps moving higher. But the Gap IS STILL THERE, totally unfilled. I still assume it is a good bet that the gap will be at least partially filled soon. So, the plan is to short financials and start exiting as the gap is getting filled. Ok, I have a plan. Now I need to execute it. I have noticed that some small banks went up like crazy (~300%!!) in the last month and a half. I am guessing the suckers will drop a lot the moment XLF starts moving down. One caveat with these banks is that they easy shoot up +10-20%/day (like today for example).