Markets are making me feel like a fickle politician. (opinions keep changing way to quick)
We did a push through failure premarket-- Pushed through 127.20-127.40 and then failed miserably!
(This is a caution signal for momentum traders. I cleaned up most excess positions based on that morning move).
There was some time to salvage the trade in the first hour as high beta tech tried to be strong.
On a more macro level- we still are around yesterday’s low of 124.97 ( some will use that as a pivot)
Under that the gap starts at $123.20 from November 30th (bulls should try and protect)
BIG SUPPORT- for Macro traders would be 122-122.25 ( holding a portion of the gap will be constructive for the longer term)
This is a tough environment for anyone that trades on a mid term time frame as these headlines changes the short term composure in a flash!
Either you have to come in flat everyday and generate cash flow- or have a long term time horizon with major risk tolerance!
The last few times that Bull flags have been built and traders like myself get up to 8-12 positions – they always slap you around and get you out.
Then a Huge Headline comes out sessions later, and we gap right back. Traders are getting rewarded for buying them when they look their worst and selling them when they look their best. I don’t run my business that way. This will change in time. Until that does, keep it light and know your time frame.
Scott J. Redler is long spy and oih
