Summer doldrums upon us? This week has presented some of the lowest volume of the year — if Friday had been Monday, perhaps we would have had an actual sustained rally attempt. With the summer slowdown, I am watching for smaller ranges on my trades that are nevertheless subject to fast breaks. Hopefully option expiration Friday will bring more directional volatility. We are very oversold, but seemingly have more room to the down side.
I tried dip buying two days in a row and made out with average gains by taking profits fast. The inability of the market to rally on a daily bar basis is now a real concern. The important thing for me is to give the trend room, since moves in the past couple years have tended to go on longer than expected. I have two scenarios I am considering.
As a framework, I am thinking the 1,030-1,040 area on the S&P 500 will get tested, but hopefully after a brief bounce next week:
Scenario One – I think we are one whoosh away from a decent rally mid next week. Ranges I am watching are $107-106 and $104-103 on the SPY.
Scenario Two – Price rallies even harder in the beginning of the week. I would then be looking to $111.5 and $110.5 for a potential short entry.
I have a new found appreciation for trading today, and will work even harder to achieve my trading goals. I spent 6 hours fixing shoes at work today, and probably more on next Monday, it gave me a fresh perspective on my trading!
It’s hard to appreciate something unless one has other experiences to compare (good thing life throws them out in spades). I appreciate trading in pajamas in the comfort of my home and content with any gains. In retrospect, traders often get put into a difficult mental position. We are not happy when we lose or don’t make money. And we are often not happy even if we made a gain, but feel we could have gotten more out of the move.
In retrospect, I made about my 2 months wage in 2 days with a couple of live trades in the chat room. I am so glad that we have the stock market and all the great traders in our chat room. Have a great weekend.
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