The trade today reminded me of the Tuesday before the monster ramp on Sept 1 that led to this current 7-9% rally off of the August lows. The action started out well, then sagged precipitously into the close and continued to do so into the after hours.
While “inflection points” are difficult to pin point, I think we are due a couple of days of option volatility spike. After this drop, it may open up another short-term buying opportunity from Friday to early next week into the Fed interest rate decision. I will then be looking for more intermediate topping action post FOMC. While this is a common view, that we will either top post option expiration or closer to end of September, being flexible with this thesis, like any other, will be important.
Mrkt Rwnd posted an excellent article today on the how to verbalize to improve one’s trading performance. I couldn’t agree more. Since I found this chat room, my trading has improved to a new level. On the other hand, it is also important to stay open minded, since too much verbalization can create inflexibility, at least when it reverts to group think. So speak your own mind and be open!
Speaking of which, inflexibility impacted my trading just this last week. I was trading very well until my end of August article. We had a very good comment from “Jadoube” (ha ha) about the falling wedge break out and beginning of month money infusion.
About 2 days after the comment, I subconsciously realized the comment was correct and many great traders had started to flip bullish. Instead of being flexible, the competitive side took over and I ended up fighting the move back up. Lesson learned. The best thing about the chat room and the comment section are that, overall, they promote out-of-box thinking for me to the extent they introduce new concepts. And I hope do hope Mr. “Jadoube” will drop by our trading room one day soon.
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