Friday, October 3, 2008

Friday Notes - Sell the News

4:15pm Did anyone really think the market would sustain today's rally after the bailout vote was taken?? Ummm, wasn't the expectation of passage already built into the morning climb?? Ya think?? And didn't Monday's no-vote meltdown occur after the market was already down on the day (i.e. wasn't the initial cause of the drop)??

OK, now that I have that off my chest, let's turn to today's trading where we definitely had two distinct bull (morning) and bear (afternoon) sessions, and you had to be nimble to trade accordingly and shift gears on the PM. At this end, I frankly did pretty well recognizing the shift amidst the bailout vote backdrop, and adjusted trade sizes accordingly by trading heavier sizes in the morning and lightening up in the PM. The result was an acceptable $25K chip gain to close out the week, which was split about equally between the two sessions.

The indicator of the day goes to the VIX which tells the whole story of the two markets. They say a picture is worth a thousand words ... or in this case about 25 thousand chips. I particularly like the 15-min chart which usually does a pretty decent job setting the backdrop.

Having said that, parts of my underlying performance weren't exactly stellar including the pre-employment news patterns which were very tradable while I seemed a step slow, as well as some morning suboptimization of the pre-vote climb -- both of which will more than keep me in the humble mode heading into next week.

Other than that, it was a decent two days to close the week and put Wednesday's draw out of mind.

I'll post a video tonight or tomorrow to discuss my thoughts on turning regret/pain into strong performance, which played a factor in my trading this morning.

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