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i looked at how the market had been acting the past week. the market
had wide daily ranges while going nowhere. i figured it would break
out of the congestion explosively, either up and down. the 1055 level
had been tested 4 times and held. but technicals such as tick, a/v
issues and vol, and prem pointed south. my indicators and systems i
monitor gave aggregate sell signals in the previous globex session, so
i figured that a good shorting opportunity presented itself.
but how can i or anyone predict a 55+ range day? no way, unless i've
got tomorrow's newpaper. but based on the above analysis and the past
week's volatility, i figured it would be just another volatile day.
the magnitude becomes apparent as the day unfolds.
so to answer your question, check the globex range as compared to
prior globex ranges and see if there's an expansion, see if you're
near an obvious breakout level (1055) where a ton of stops are
probably placed below it, and evaluate pre-open market mood by talking
to pit guys or watching CNBC.
what tim, pete, I, and others are saying that once it's know to be a
wild day (around 10 am CDT yesterday), when the market is breaking all
kinds of support and pivot levels typical of a panic, then get out of
your position when it's prudent, and then stay out for the rest of the
day. i didn't get slipped on the open yesterday, but when i got out,
i was slipped 3 handles, and for me, that was a lot! fast market
conditions are bad for everyone.
TJ
---Neil Harrington wrote:
One question...
How would you advise a one or two lot trader to make the decision to
trade or not trade on a particular day. In other words, there seem to
be many days the S&P can be excessively volatile in the first 15
minutes or so, then settle into a typical day. If you were a one or
two lot trader, how and when do you decide today is a day not to trade
because... ?
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