Friday, October 28, 2011

Zig-zagging after yesterday's huge move

The market barely moved outside the range of the last 5 minutes of yesterday's session. And that didn't change during today's session. Boring coiling/consolidating action all day long. A huge triangle formed intraday. Price broke it near the close, but only moved up little.

5m-chart SPY:

Daily charts DIA, QQQ and SMH:

No worth mentioning moves in gold, silver, copper, oil or the euro. The action was just as boring as everything else today...

I tried a long in SPY an hour before the end of the session when the triangle (see chart SPY higher) seemed to break. A strong candle with good volume looked like a great entry, but my stop under the low of the candle got hit within 15 minutes. In hindsight, I moved in to early. At that point, we hadn't seen a close outside the triangle yet...

No need to try and trade the breakout in the last 15 minutes of trading. The close is always so volatile, you need very loose stops and lots of luck! Plus the time-frame left is so small, you can't expect big gains.

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