The transformation is complete. We're on autopilot until the EOD rampup.


As is all too often the case, I was early. Early tightening the stops yesterday (though this morning's headfake might have convinced me to sell anyway). But especially early on my thesis. My POMO intraday drop thesis played out perfectly today. Unfortunately I was too discouraged by the externalities from last time I tried to play it to keep my eye on using the same strategy again. Lesson learned.

My main dilemma today is whether to go long for the scalp or use the coming run-up as a good short entry. And I'll need to make that decision fast as events are catching up with me.

T minus 15 minutes to liftoff?

Only question is which way...

update @12:23


This may be the answer, but I'm not convinced. I'm sitting with my finger on the buy button, but feeling a bit wary and cagey... So I wait.

Position update

I got shook out of TYP yesterday even though it looked like I shouldn't have. So I'm mostly sitting in cash today. I'd love to chase today's declines but there's a good chance they'll reverse (intraday declines are common on POMO days before the ramp). I may use this as a buying opportunity to go long, but I worry about getting trapped using unsettled funds.

I took some settled cash and put it to work in ZSL which I'm liking the look of and will throw up a chart with my thinking on which later.

I'm planning on sitting out most of the day and seeing what happens in the last hour. Unless I see something really compelling I'm just going to wait.

Follow the sqiggly lines

Holding on a bit longer has served me well. I've got some tight trailing stops on at this point (0.25 on SPXU). Gains are nothing to jump up and down about, but they're gains nonetheless so I'm not going to complain.

Just waiting to this wedge to resolve... Unless it's not really a wedge, in which case we just churn around the VWAP I assume. Also of note - the consolidation/distribution area after this mornings' gap did not follow the Fibonacci 161.8 level that the gaps up recently did. Maybe the quant computers aren't programmed to do that on a down? I still need to get set up for backtesting and really see the incidence of it.

Nuttin'

I'm just hanging around, watching the tape, working on getting a backtesting package up and running. Another day of VWAP zeroing in on 161.8% of the gap up. I'm still in my positions. POMO tomorrow, so I'm going to see of the thesis holds or was just a fluke. Only one I'm really kicking myself for is the tech short - but my view is that tech will rollover first and I'm not afraid to be a bit early on that trade. Most of the profits will be made in the early phases of that - much like the run up has gone.

A further examination of the charts reveals my main mistake: Not following through on my indicator of waiting for the CCI to cross 100. This was a big one - had I waited I would have gotten exactly the move I was looking for, just with a different timeframe. The intra-day down move happened. But it happened differently from all the others which preceded it. Go figure.

Moving forward, I'm going to split my high-risk money in two parts. One will continue to scalp short. The other will be kept in cash waiting for degenerate small-cap biotech stocks (and a few others, like BPOP) to pop and taking the 10 minute trades on those awful beasts. I've missed out on a number of those on my screener due to lack of settled cash. My low-risk money has been withdrawn from precious metals and is sitting in a money market fund for the time being, waiting for more macro clarity before being allocated. If backtesting reveals a good trend on the gap-fibonacci theory I've been exploring, I may try to work that. I'd probably need to trade futures for that size of move to be really viable though.

What's so magical about 1037

Fibnoacci Numbers? I'm going to have to try to get some backdata and see.

An investment is a trade gone bad...

I'm still in. I don't understand what's so magical about 1037, but it's acting as resistance/support. Have the VWAP algo's taken a shine to it?

At any rate, there remains a question for me to ponder. Why didn't things go according to plan. Is it that the correlation I saw was only coincidental? Or has something changed?

One possibility is that the people who run the equities-ramping program are aware of the attention that has been gathered and have changed the operations of the program. Another is that a critical mass of traders have started to front-run the expected late-day surge.

At any rate, I'm prepared to take a bit more pain. We're extremely overbought, though that concept has had very little meaning of late. I expect to have enough of a pullback to at least recoup the morning's losses. I need to sit down and draw up a new battleplan in the meantime.

Lessons:
I should have waited for opportunity to get long instead of trying to swing from short - since higher was what I expected in the medium-term.

I should possibly have waited until premarket to go short. Depends on what happened on those other POMO down-days and when the falls really began. Right now I have no way of seeing historical pre/post-market action though.