Thursday, November 17, 2011

Much followed triangles break down

The market went straight down at the opening and reversed towards the open/yesterday's close. But that was the high of the day, and after forming a wedge, price dropped... hard! Now all major indices broke their wedges/ranges on the the daily chart. Bulls came in strong in the last minutes of the session, but the question is, will that be enough?

5m-chart SPY in the trades-section.

With stocks breaking lower, bonds are breaking higher...

Daily charts DIA, QQQ and SMH:

Metals all dropped, even more than stocks. Silver losing over 6%! Oil was also a big loser and went back under the 100-level.

Two losers in SPY today and as 'punishment', I don't place anymore trades if I have two losers in one day.
With the first one, I was a little unpatient, the candle didn't even close, but I went short anyway when a presumed bearflag seemed to break. Fake move and out for a loss (smaller position).

Second trade was right after the first one (an even smaller position luckily). Good volume, price action and a higher high. I went long, but a very wild price swing stopped me out. SPY dropped about 30 cents in 15 seconds and then reversed just as sharp. Incredibly fast move, one didn't even had the chance to adjust stops if wanted. Of course after being stopped out, price went up in the anticipated direction. First target would have been met.

Too bad for the 'two losing trades'-rule. When a wedge formed and broke to the downside, that was the ideal short! We lost 1.5% in just over half an hour.

5m-chart SPY:

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