{"id":208,"date":"2008-11-18T23:07:41","date_gmt":"2008-11-19T04:07:41","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=208"},"modified":"2009-06-03T11:11:55","modified_gmt":"2009-06-03T16:11:55","slug":"expect-the-unexpected","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/expect-the-unexpected","title":{"rendered":"Expect The Unexpected"},"content":{"rendered":"

Today, from 12pm to 1:45pm the SPYs trended down very steadily from 87 to 83.5.\u00a0 There was a readable seller for the entire downmove.\u00a0 When the SPYs attempted a reversal it failed around 84.6.\u00a0 This led to a downmove to the low of the day at 83.\u00a0 I was able to make a nice chop in the steady downtrend.\u00a0 But I gave it all back and a lot more in the final 30 minutes when the market rallied.\u00a0 I made a bunch of mistakes that led to my large loss but the biggest one was not respecting current market conditions.<\/p>\n

The market we are currently in can turn on a dime.\u00a0 If a large seller materializes the market will get crushed.\u00a0 If a large buyer steps in the upmoves will be much greater than you would normally expect.\u00a0 So it is essential to trade with less size than normal, or if you are trading with size to be tighter with your stops.<\/p>\n

From 3pm to 3:30pm I managed to stay afloat while maintaining a large short position.\u00a0 Each powerful upmove in the market was led by vicious downmoves.\u00a0 This kept me in the game but also gave me a false sense of security.\u00a0 I felt as long as my PnL wasn’t that bad and I maintained my core short position that I would make a large chop when we retested the low for the day.\u00a0 But alas that was not to be.<\/p>\n

At 3:47pm the SPYs made a powerful upmove through 85.50.\u00a0 I attempted to cover my entire short position for the first time.\u00a0 It was the third consecutive higher high for the SPYs and seemed as if they would close at the high for the day.\u00a0 I was unable to get any stock on this powerful move.\u00a0 My inability to cover my short position when I tried to sweep out was further evidence that there was enormous buying pressure in the market.<\/p>\n

At 4:00pm the SPYs were at 86.60.\u00a0 After the market closed they traded as high as 87.20.\u00a0 In the aftermarket I observed a lot of buying at 86.70.\u00a0 Eventually, the futures traded down a bit and the SPYs traded down to 86.20.\u00a0 I am currently short 1,000 shares.\u00a0 If the futures are down in the premarket tomorrow I will look to cover at 85.50.\u00a0 If the futures are up then I will be covering above 87.20<\/p>\n

Important levels to watch on the downside for tomorrow are 85.50, 84.60, and 83.70.\u00a0 If the SPYs trade below 83.70 quickly I would expect a move to the 83 support level.\u00a0 On the upside 87.70 will offer some resistance.<\/p>\n

intraday Chart of the SPY<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Today, from 12pm to 1:45pm the SPYs trended down very steadily from 87 to 83.5.\u00a0 There was a readable seller for the entire downmove.\u00a0 When the SPYs attempted a reversal it failed around 84.6.\u00a0 This led to a downmove to the low of the day at 83.\u00a0 I was able to make a nice chop in the steady downtrend.\u00a0 But … Read More<\/a><\/p>\n","protected":false},"author":143,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[30,18,301],"class_list":["post-208","post","type-post","status-publish","format-standard","hentry","category-steven_spencer_steves_blogs","tag-prop-trading","tag-smb-capital","tag-trading-blog","no-post-thumbnail"],"yoast_head":"\nExpect The Unexpected | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/expect-the-unexpected\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Expect The Unexpected | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Today, from 12pm to 1:45pm the SPYs trended down very steadily from 87 to 83.5.\u00a0 There was a readable seller for the entire downmove.\u00a0 When the SPYs attempted a reversal it failed around 84.6.\u00a0 This led to a downmove to the low of the day at 83.\u00a0 I was able to make a nice chop in the steady downtrend.\u00a0 But ... 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