{"id":27808,"date":"2013-06-09T11:05:25","date_gmt":"2013-06-09T15:05:25","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=27808"},"modified":"2013-06-09T15:06:14","modified_gmt":"2013-06-09T19:06:14","slug":"were-you-too-bearish-after-the-jobs-report","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/were-you-too-bearish-after-the-jobs-report","title":{"rendered":"Were You Too Bearish After the Jobs Report?"},"content":{"rendered":"

Were you too bearish after the jobs report this Friday?<\/p>\n

Let’s set up the scene for Friday’s trading. \u00a0We had bounced from 160 SPY to 163ish before the report. \u00a0Then the\u00a0pundits<\/a> and traders began to battle at the 163.50 level. \u00a0At first it appeared the buyers had won sending the market towards 164 SPY, but as traders we knew this was an important technical level. \u00a0So a move up to here was not yet confirmation it would be a trend higher day. \u00a0We needed to clear 164 SPY as well. \u00a0SPY seemed to double top just in front of SPY 164 R (resistance) and then broke below 163.40, a level it failed to crack multiple passes on the open. \u00a0Was this a shorting opportunity?<\/p>\n

On most trading days with the setup above we would want to short below 163.40. \u00a0We might also want to short in front of 164 if we had a bearish thesis, as the price action was offering confirmation as SPY could not trade above 164. \u00a0And then SPY broke the range to the downside when it traded below 163.40. \u00a0But this was a trade too bearish as SPY held the real level, premarket support near 163ish.<\/p>\n

Later in the day many traders wondered if we would sell off into the close. \u00a0\u00a0But trading statistics show this strategy was historical a loser. \u00a0Let’s take a look at a back-test that one of our quants did based on this setup that shows shorting into the close was too bearish.<\/p>\n

\n
<\/div>\n
\u00a0I wanted to test the idea of of a pullback to morning resistance in the context of a day like we had\u00a0on Friday.<\/div>\n<\/blockquote>\n
\n
Here’s the test:<\/strong><\/div>\n
today’s Open > prev High<\/div>\n
px @1030 > Open<\/div>\n
then buy if the low of a 5min bar between 1400 and 1500 is below the high of the first half hour and hold to the close<\/div>\n
2011-present (SPY)<\/strong><\/div>\n
Avg 10bps<\/div>\n
21\/37+<\/div>\n
Std 35bps<\/div>\n
t 1.7<\/div>\n
Avg Win 32bps<\/div>\n
Avg Loss 17bps<\/div>\n
<\/div>\n
Rather than threatening the uptrend day, that pullback has actually been a sound buying opportunity.<\/div>\n
<\/div>\n<\/blockquote>\n
We are still in a bullish market and must adopt our trade strategies to this market until the market turns. \u00a0As you can see from the data above, the opening short below 163.40 while often a good short, was not based on the market structure we are presently trading. \u00a0Quant research shows us that shorting into the close was also too bearish of a trade. \u00a0Friday was an excellent example of how short term traders can use quant analysis to improve their trading.<\/div>\n
<\/div>\n
You can be better tomorrow than you are today!<\/div>\n
<\/div>\n

Mike Bellafiore
\n<\/em><\/p>\n

The PlayBook<\/a><\/em><\/p>\n

One Good Trade<\/a><\/em><\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

no relevant positions<\/p>\n","protected":false},"excerpt":{"rendered":"

Were you too bearish after the jobs report this Friday? Let’s set up the scene for Friday’s trading. \u00a0We had bounced from 160 SPY to 163ish before the report. \u00a0Then the\u00a0pundits and traders began to battle at the 163.50 level. \u00a0At first it appeared the buyers had won sending the market towards 164 SPY, but as traders we knew this … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[1226,3116,430],"class_list":["post-27808","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","tag-bearish","tag-jobs","tag-report","no-post-thumbnail"],"yoast_head":"\nWere You Too Bearish After the Jobs Report? | 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\/were-you-too-bearish-after-the-jobs-report\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Were You Too Bearish After the Jobs Report? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Were you too bearish after the jobs report this Friday? Let’s set up the scene for Friday’s trading. \u00a0We had bounced from 160 SPY to 163ish before the report. \u00a0Then the\u00a0pundits and traders began to battle at the 163.50 level. \u00a0At first it appeared the buyers had won sending the market towards 164 SPY, but as traders we knew this ... 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