Signal came at the end of the day today. I will post more information about this trade when time permits.
Looks like our political system is still in tac. The market loves the result TODAY. This is a market that can and will bite us so be very careful. I am still looking for a short signal (Close Below the Low of the High) on the Daily chart. Yesterdays candle is the driving candle at this time.
The challenge I am having is last weeks weekly candle. It is the low in the market and for it to be taken out we need to see it close above its high and that is just an amazing move. The other scenario which is more likely is for it to make a new low. This is the camp I am in today. Give this some time and it will fix. Today I am looking at the 200MA to see if it stays bearish.
Make sure to read my post about the XLF. Everything happened the same this week for the SPY except I am out of all positions at this time. You can see on the chart the resistance I have drawn. This is close to the 200 MA and will be the attraction next week. We will have to see if it makes it through this area. What I will be looking for is a SHORT SIGNAL (Close Below the Low of the High) on the daily chart. The weekly chart is jacked at this point. I do expect this to stay wacky.
Trading got really crazy this week. The XLF which went down really hard as did the entire market made things really fun. I mentioned last Friday that things were going to get real interesting and I did get short the XLF. WHAT A WEEK!! I scaled half of the trade on Monday and a quarter Thursday. I then took another contract this morning leaving me with one contract. The rules at this point are to use skill to manage the last of the position. When I see a LONG SIGNAL (Close above the high of the Low) on the daily I will exit the current position. Looking forward things are going to stay wacky. The buying that came in at the end of today was pretty strong. I will be watching the $28.04 which is the 38.2% fib level and will more than likely be out of the trade I am in now. When I see a daily SHORT SIGNAL (Close Below the Low of the High) I will enter short again. Stay Tuned this is so much fun.
We had a close below the Trailing Stop. So the trade reverses to the short side. I have closed the Calendar and the Long call. I am now in a 70 delta Put. Open position is a 3/20/2020 expire 341 put for 9.17. This looks to me like a top is starting to form. The last top formed around 1/22/2020 and is being tested now. The pull back tested the 38.2 fib level so let’s see if it holds. Fed is saying they are going to let off the accelerator here real soon. We have the Corona Virus spreading outside of China. Hang on this may get interesting.
These transition periods in the markets are rough on this trading system. This trade was looking good until Friday. The action all week was pretty wacky. Thursday sure looked like it was a bounce. Then Friday opened up and just ran down. Per the rules of this trade. There is a close below the Trailing Stop so we closed the Calendar and the long call and purchased a short put 70 delta. See below
Sold 6 each 3/20/2020 30 Puts at .34
Bought back 6 each 3/20/2020 31 Calls at 1.11
Bought back 6 each 2/21/2020 31 Puts at .29
Bought 8 3/20/2020 31 Puts at .70
Weekly Chart signaled last week. Close above the high of the low candle. Daily Chart is on the move up with the Trailing Stop at 30.77. I rolled the 31.00 and picked up a credit of .12 (.03 bought back and sold next week for .15) to next week and kept everything else the same.
Weekly chart closed above the high of the low last week which predicted a really strong move this last week. The daily chart is acting like a normal up trend as well. Trailing stop is 334.52 today. I rolled the 332.00 to the 337.00 for next weeks expire. My calendar protection is 323.00 for a 3/20/2020 expire. Then along side this trade I have a Long Call which I bought last week 322.00 for 13.57 and it is trading at 17.66 currently. I have a larger account that I am running this trade in btw.