The ban on short-selling financial stocks has been officially lifted. Expect some back and forth gyrations this morning. There is a lot of news, but it's mostly the usual stuff - LIBOR, Jobs, Earnings, Retail, and Financial operations like merger talks and raising cash. I'm not going to get into any of it other than to say it's a lot of the same type of news we've been hearing, which means the market is probably going to do what it's going to do today - regardless of the news.
I speculate we will get some bouncing today left over from yesterday's potential Spinning Bottom type of price action. I also expect some selling fits here and there as some Hedgies play around with shorting Financial stocks. I'm not looking for a lot of shorting, however, because the bloom is off that rose, the market has slammed down so much that many traders probably consider shorting a higher risk trade right here. We didn't get a blowoff climax yesterday, which means that we are still succeptable to another big down day, but that might not happen this morning simply because we hit a short term peak in volatility yesterday. I really wanted the blowoff yesterday to take some of the volatility risk out of the market, but it didn't happen. That doesn't mean that yesterday can't be a short-term bottom, it just means I need to see a confirmed bounce before I think the volatility eases up a bit. Therefore, I'm still treating every directional trade as an intra-day swing.
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Hi Dwight,
ReplyDeleteI am wondering if on a 1 day 1 minute to 2 day 2 minute chart are the candlestick patterns just as valid as 5 day 5 min or what the best time frame is for intraday moves? I am using a 1 day 1 minute playing swings on the DIA.
Thanks,
Garrett
Hey Garrett,
ReplyDeleteFrom your post yesterday, ATM strikes are what I trade also. When I get a little more money in my account and a bit more confidence with my trading, I'll probably go a couple strikes ITM because of the higher delta. As for chart intervals, I usually don't go under 15m. I look at the 5m sometimes and never the 1m.
Joe
Joe,
ReplyDeleteThanks for the help. Are you on a 5 day or 1 day chart using R1 and S1 levels for target areas? Appreciate the help and hope everyone is doing well.
Garrett
Garrett,
ReplyDeleteI don't use pivot points at all. I just go off the charts for my short term resistance and support levels. I also use other indicators for my entries such as moving averages and bollinger bands.
Joe
Thanks Joe for the help, I appreciate it.
ReplyDeleteGarrett
Garrett,
ReplyDeleteI also buy ATM, use the 5day 15 minute , I really never look athe the 1 minute charts - I think I'd go nuts :)
Thanks Joe
Claudia
Garrett - In my opinion the candle and/or candle patterns are relative to the timeframe trading. If you are on a 5 min chart then the pattern is good for that 5 min period, etc. I personally look for setups on the daily charts and use the intraday charts to perfect entry/exits. I would agree w/ Joe in that I generally dont go below 15 min. Much tighter and you cant see the forest for the trees.
ReplyDeleteTroy
Thanks everyone for all of the great insight. It is pretty neat that we have such great support in a really fun market.
ReplyDeleteThanks All,
Garrett
Troy,
ReplyDeleteVery well stated. I also check the daily chart first, then use the intraday charts to time my entries. Have been so used to using the intraday charts that I totally forgot to mention the initial chart I look at.
Good call- thanks
Claudia
Sorry if this is redundant but what is the difference between daily and intraday charts? For my directional trading I use a 9 month than go to a 3 month. I haven't found setups for my directional plans right now so I am trying to trade small swings on the DIA and SPY but it is still a work in progress.
ReplyDeleteThanks again everyone,
Garrett
Garrett - The daily chart is where the individual candles represent a day or trading period. The intraday chart is where the candles represent a timeframes within the day e.g. 5 min, 15 min, 30 min, etc.
ReplyDeleteIn the current market conditions, I look for intraday swings using the (60 day, 60 min) and (30 day, 30 min) then perfect the entry/exit with the 15's.
As I write the SPY is on key support with a decending triangle (using the 30's).
I am also keeping my positions very small and not holding overnight.
Thanks to the support & experience of Dwight, these strategies have been very effective in this market condition.
Good luck trading,
Troy
Hey Garrett,
ReplyDeleteDwight and others refer to the 6mo as the daily chart. In addition to the daily I use the 5 day intraday (within the day) with the 30,15, and 5 min charts to confirm signals I see. Lately, to initially set support/resistance levels I'm having to look at the 5 & 10 yr charts that I rarely referenced before. As for trades, I'll take ATM or one step ITM. Like most everyone here, I'm still very much a student. Good luck with your trades!
Troy, good job selling the triangle! I couldnt bring myself to believe the market was actually going to go lower so I didnt. Just proves to trade what you see not what you think!
ReplyDeleteThese are crazy times. Dow breaking 9,000. It doesnt seem real. GM is at a 58 year low. They say f and gm are probably going bk.
Dwight, what would happen to gm and f if they did go bk. Do they get bailouts too. Do they just go away??? Very strange.
Can't wait for VC tonite!!
ReplyDeleteWas today the big blowoff?
Let's hope so.
Great job with trades ya'll.
Did calls on Q's this am and made
+ 6%.
Entered small position call on Q's later exit with small loss. Still had a + profit for day.
What a closing-didn't have the heart to buy puts as the market was sailing south!!
Hey Everyone,
ReplyDelete$VIX at an all time high. All the major indices sitting between support zones. Hm..
Joe
Hmmm.... agreed. I wonder what NostraDwightus will see ahead. I sure hope this is the bottom.
ReplyDeleteThanks everyone for the help. Good luck in the days to come.
ReplyDeleteThanks,
Garrett