{"id":279,"date":"2008-12-31T12:44:57","date_gmt":"2008-12-31T17:44:57","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=279"},"modified":"2023-04-10T17:27:31","modified_gmt":"2023-04-10T21:27:31","slug":"thats-not-a-short","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/thats-not-a-short","title":{"rendered":"That’s NOT a Short!"},"content":{"rendered":"

Yesterday one of our most improved traders was trading GS. \u00a0Great stock to be in. \u00a0Great job of being in when many were taking off. \u00a0 This talented young trader, let’s call him MROD, developed a detailed trading plan for GS. \u00a0MROD saw that 80 was resistance on the longer term chart in GS, remembered that the last time it saw these levels it traded just a bit thru to 80.10, and developed a plan to short GS at 80.10. \u00a0This was all excellent. \u00a0But then it got ugly. \u00a0And he started shorting when GS was NOT a short. Let’s discuss.<\/p>\n

On the longer term chart resistance could be found at 80 in GS. \u00a0The next levels for us were 82.20ish and 87ish. \u00a0We trade a short term style so if your levels are different understand our different trading time frame. \u00a0And MROD wanted to short at 80.10 because of his memory trading GS. \u00a0I really like this short. \u00a0Not for huge size. \u00a0But I like the idea. \u00a0The longer term significant resistance level trumped the intraday low volume uptrend. \u00a0I like that he remembered how GS traded and a level not necessary recognizable on the chart. \u00a0I like the fact that he was not a slave to the chart and factored in how GS traded. \u00a0This was all terrific. \u00a0And GS had trouble trading above 80.10 yesterday at first. \u00a0This was a really solid, thoughtful trade.<\/p>\n

But then GS traded above 80.10 and MROD shorted the 80.20. \u00a0And then GS went higher and I heard a few others on our desk short GS at 80.35. \u00a0MROD tried to short GS again at 81. \u00a0This is not good. \u00a0GS above 80.10 and especially 80.20 is just not a short. \u00a0The level was 80, 80.10. \u00a0And now GS is above this price. \u00a0Now granted the volume was light but it is still was not a short. \u00a0GS had been in an uptrend for four hours intraday. \u00a0GS was now above the 80 level. \u00a0The next level was not for points. \u00a0There was not evidence watching the Box that GS was about to trade lower. \u00a0Now maybe because of the light volume GS was not a long for you yesterday. \u00a0But above 80.10 it is not a short.<\/p>\n

I perfectly understand what some on our desk were thinking. \u00a0One of our new traders and I discussed his confusion about GS’s upmove yesterday before today’s Open. There was no news catalyst that was announced yesterday. \u00a0GS had trouble trading above 78 and now it’s above 80 with no news. \u00a0This doesn’t make sense. \u00a0GS cannot trade higher. \u00a0Sure it can. \u00a0And there was one very good reason that some of our younger traders had not considered, which we discussed at our SMB AM Meeting<\/a>. \u00a0And there was really no reason for them to consider this other than Steve and I kept commenting on what might be happening throughout the day. \u00a0So what was this mysterious catalyst yesterday? \u00a0The stock was being marked up.<\/p>\n

At the end of the year stocks can get marked up. \u00a0Someone wanted GS higher. \u00a0There are many reasons why. \u00a0Maybe some have GS in their portfolio and a higher GS will make their portfolio more attractive to investors. \u00a0Maybe some need GS higher for an options play. \u00a0Whatever the reason GS acted like a stock being marked up. \u00a0So in the back of your mind when trading GS yesterday you needed to understand that the desire to mark GS up could be a catalyst.<\/p>\n

Stocks above resistance are almost always not shorts. \u00a0Fighting the tape above resistance will manifest a frustrating and short-lived trading career.<\/p>\n

Happy New Year!<\/p>\n

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

\"GS<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Yesterday one of our most improved traders was trading GS. \u00a0Great stock to be in. \u00a0Great job of being in when many were taking off. \u00a0 This talented young trader, let’s call him MROD, developed a detailed trading plan for GS. \u00a0MROD saw that 80 was resistance on the longer term chart in GS, remembered that the last time it … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":281,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[4676,30,18],"class_list":["post-279","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mike-bellafiore-bellas-blogs","tag-day-trading","tag-prop-trading","tag-smb-capital"],"yoast_head":"\nThat's NOT a Short! | 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\/thats-not-a-short\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"That's NOT a Short! | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Yesterday one of our most improved traders was trading GS. \u00a0Great stock to be in. \u00a0Great job of being in when many were taking off. \u00a0 This talented young trader, let’s call him MROD, developed a detailed trading plan for GS. \u00a0MROD saw that 80 was resistance on the longer term chart in GS, remembered that the last time it ... 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