{"id":5800,"date":"2010-07-08T18:27:37","date_gmt":"2010-07-08T22:27:37","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=5800"},"modified":"2010-07-08T22:13:46","modified_gmt":"2010-07-09T02:13:46","slug":"a-small-rip-can-lead-to-a-big-chop","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-small-rip-can-lead-to-a-big-chop","title":{"rendered":"A Small Rip Can Lead To A Big Chop?"},"content":{"rendered":"<p>I foolishly decided that buying NTRS on a pullback to 48.50 this morning was a great risk\/reward trade.\u00a0 NTRS had broken its recent downtrend yesterday and closed at the high of the day on good relative volume.\u00a0 In my many years of trading this has proven to be a high percentage play.\u00a0 BUT during the past three weeks I have noticed that strong finishers, whether they trended up or down for the day, were tending to reverse the following trading day.\u00a0 On several occasions I have even made a counter-trend Second Day Play to take advantage of this pattern.<\/p>\n<p>Nevertheless while reviewing NTRS&#8217; chart last night the 48.50 level looked so good to me that I decided if it pulled back to that level this morning I would get long.\u00a0 I even had one of our interns include it as the &#8220;Best AM Idea&#8221;.\u00a0 Of course the trade didn&#8217;t work.\u00a0 In fact, it was a great short below that level and trended down all the way to the 47.30s prior to some late day buying.<\/p>\n<p>I&#8217;m not going to guess as to what underlying factors are causing so many second day reversals but instead will focus on simply making the &#8220;reversal&#8221; trade as often as possible.\u00a0 I have started a spreadsheet to track various attributes of the stocks that are trending very strongly on a particular day so I can closely track other recent trading characteristics of these stocks to develop a more detailed trading edge.<\/p>\n<p>I have included a chart below of POT that is a prime candidate for this reversal trade tomorrow.\u00a0 It would be preferable if it gapped above today&#8217;s high and I could short it on a drop below 91 and look for a move down to89.\u00a0 My only slight concern with this trade not possibly working is that POT was accumulated as part of a general buying wave today in all the Ag name such as MOS, MON, and CF.<\/p>\n<p>I will tweet further details of my trading plan in POT in the pre-market and after the open on my twitter account. @spencermagic<\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/ntrs-breaks-trend-reverses-next-day.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-5806\" title=\"ntrs breaks trend reverses next day\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/ntrs-breaks-trend-reverses-next-day-300x220.png\" alt=\"\" width=\"300\" height=\"220\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/ntrs-breaks-trend-reverses-next-day-300x220.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/ntrs-breaks-trend-reverses-next-day.png 490w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p><a href=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/pot-breaks-recent-downtrend.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-5807\" title=\"pot breaks recent downtrend\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/pot-breaks-recent-downtrend-300x220.png\" alt=\"\" width=\"300\" height=\"220\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/pot-breaks-recent-downtrend-300x220.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2010\/07\/pot-breaks-recent-downtrend.png 490w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>I foolishly decided that buying NTRS on a pullback to 48.50 this morning was a great risk\/reward trade.\u00a0 NTRS had broken its recent downtrend yesterday and closed at the high of the day on good relative volume.\u00a0 In my many years of trading this has proven to be a high percentage play.\u00a0 BUT during the past three weeks I have &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/a-small-rip-can-lead-to-a-big-chop\" class=\"more-link\">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":[8,3,15],"tags":[507,1168,477,1169,1167,1166,514,467],"class_list":["post-5800","post","type-post","status-publish","format-standard","hentry","category-steven_spencer_steves_blogs","category-technical_plays","category-trading_theory","tag-a","tag-big","tag-can","tag-chop","tag-lead","tag-rip","tag-small","tag-to","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A Small Rip Can Lead To A Big Chop? | 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\/a-small-rip-can-lead-to-a-big-chop\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Small Rip Can Lead To A Big Chop? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"I foolishly decided that buying NTRS on a pullback to 48.50 this morning was a great risk\/reward trade.\u00a0 NTRS had broken its recent downtrend yesterday and closed at the high of the day on good relative volume.\u00a0 In my many years of trading this has proven to be a high percentage play.\u00a0 BUT during the past three weeks I have ... 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