Trading Plan for 9/30
[pay]Pattern notes.
Ugly. The afternoon’s first plunge created a low that required being retested because it had formed a sentiment extreme and its 3-minute RSI was oversold. A second plunge stopped short of retesting the low. That optimism doomed the next bounce to failure, and the low was retested.
The retest bottomed going into and coming out of 3:30, then bouncing 25 points in 15 minutes. That’s not a terrible bottom as bottoms go. But it’s only part of a bottom that still requires an intraday probe of lower lows that recovers to close positive.
It’s entirely possible that the selling was exacerbated by the pre-holiday’s timing (Jewish New Year). Participation will be reduced, and sponsorship for trending will be difficult to generate, so there didn’t seem to be much reason for holding longs. It’s not a buy signal, but it’s one step closer. At this moment however, that one step could be a big one.
Indicators and Internals.
The retest’s RSI was oversold again at the last hour’s low. It wasn’t as straightforward as the first plunge’s low that required a retest. But S&Ps dropped almost 15 points after the cash session close, to within 5 of points of session lows, so a retest is almost obligatory.
Tuesday’s opportunities.
I was able to annotate the charting room overnight until 4:00am yesterday, and will be on-line overnight as much as possible. Meanwhile, here are some things you can do in this environment:
Practice deep-breathing. Being on the right side of a trade is no less stressful than the wrong side on days like this. Proper breathing can help to sharpen your focus on any day.
Share your success stories. Market gyrations like these leave me no time to trade. It takes one hand to count the number of trades I’ve gotten off in the past two weeks. I’m dying to hear details. Let me know how you’re doing so I can at least experience it vicariously!
Share your non-success stories. The market moves have been amazing, and we’ve generally anticipated both big moves and small. I want to know if you’re not catching your share.
Have a Happy New Year! If you’re celebrating tonight and tomorrow, don’t worry. The markets will be right here where you left them.
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