Taking my 1/3 size Short from 4042 into the weekend. Volume dried up after EU close and my expected 4000 test during RTH did not happen.

However, I'm NOT concerned by bullish close on Friday. This is based on the stats that bullish close intra-day but yet lower than the previous day's close is actually bearish. I call them 'oddball days'. More than 400 days had this pattern in the last 20 years and the profit factor for shorting is 1.5. The only caveat is the fact that Gap UP is more likely on Monday. Since my sizing is small, pain is minimal so far and I'm OK with that risk.

I will close my position by EOD monday if there is no bearish follow-up. I'm mindful that 200DMA is acting like support now & options market structure favors a slow grind to 4200 rather than 4000 and below but I'm willing to bet against them. Just for 1 day on Monday.

Lucky to have a 'Gap down' opening Monday AM (less probabilistic event) and I'm back to break even now.

I'm still betting on a down day and holding my short position. I will be closely watching the opening tick and Delta followed by vwap bounce response to decide on scaling in or bailing out.

Still Short from 4042.

I saw 20 pts MAE Friday PM and now saw 20 pts MFE Monday AM.

Back to square one as I'm typing.

ATR is around 35 points so far. Not bad but if I add gap, then it's a respectable 50. That means the high and lows may be in place already. Bad news for me is that reversal day to test Friday close of 70 i.e gap closure, is still a decent possibility.

Though 4000 test seems less likely today, I'm taking that gamble and let my OCA orders take me out.

That's sweet

Short Entry - 4042. Exit - 4003

My expected bearish follow up on Monday happened. More importantly, I didn't settle for a smaller profit when it was tempting to take 10-15 pt before EU close. Once again, I took myself out of the decision making process after OCA orders in place and then handsomely rewarded.

However, there are still execution issues. I could have and should have added at vwap test @ 4045. (I was gun shy after seeing a big MAE on Friday, I suppose). Another location could have been 4020 after new lows made post EU close. Will keep trying to improvise.

Prep for Tuesday.

200 DMA has been in play for the last few days. We closed below it on Monday.

Such setups happened on more than 60 occasions since 2003 and the follow up is usually bullish. PF - 1.9.

However, gap up is more likely and PF is lower compared to gap down.

I am playing this by setting limit buy order just below 4000. I will consider scaling in @ 3080 i.e last week's crime scene of Fed speech Bullish move. Target 4040.

Long 3998.

As per plan above, I placed a limit buy order and got filled pre-open.

Price is choppy but with an upward bias. Likely flat open with no sign of gap up open. That's ok. My bullish bias persists.

I may consider adding below Y-L at 3880. I have a bad history of doubling down on my losers and hence usually avoid it or at-least have a very tight stop.

Exit around 4040. Still within ATR range and hence likely but less so if Y-L was taken out. In that case, I may be happy with 2020 ONH area.

Just hope you were able to deal with this down day without too much damage. I know it is tough to change bias while in a trade.

Narcissus 

Long 3998. As per plan above, I placed a limit buy order and got filled pre-open. Price is choppy but with an upward bias. Likely flat open with no sign of gap up open. That's ok. My bullish bias persists. I may consider adding below Y-L at 3880. I have a bad history of doubling down on my losers and hence usually avoid it or at-least have a very tight stop. Exit around 4040. Still within ATR range and hence likely but less so if Y-L was taken out. In that case, I may be happy with 2020 ONH area.

trendisyourfriend 

Just hope you were able to deal with this down day without too much damage. I know it is tough to change bias while in a trade.

I admit I didn't anticipate a deep selloff. I was prepared for 3870 'Fed Crime scene' revisit but not 3920. I got out @ 3950 - End of day order (as per my strategy rule). 50 pts loss.

Though it's a sizable loss, this is ths cost of doing business for me. I generally don't change bias whilst I'm in trade. I don't double down on my losing trade either. I make money by scaling in on my winning trades and holding them longer. Hence I make sure that my losing trades are <1 ATR but winning trades can be >1 ATR. My winning percent is over 60%. With this execution strategy, I am consistently profitable.

It's so easy to second guess a strategy and give up after a losing day like this. I want to share the data behind my trade.

This is the stats for day after 200 DMA test since 2003. Yesterday's move was highlighted.



Here is the seasonal data of 20 years. Tuesdays in December after a lower monday close.



Finally, options structure also favored 4000 anchoring but unfortunately it didn't work this time. I don't regret taking this long and will probably do this again under similar circumstances in the future.

Short 3934

Stats favor shorts today. Ideally I want to see a gap to decide on better edge and my strategy also works better that way. However, I have to trade what's in front of me.

Won't scale in until I see a clear winner today.