EOD Thoughts

There are several positions that I'm very interested in, I've been being very careful in not just jumping in to them and the reason is this. Based on short term signals this week and from late last Friday, I've been expecting some short term moves, a move a bit lower (stop run/head fake) and that to be followed by a move higher that may or may not be worth trading as a hitch-hiiking trade as I have been calling it. From there, short positions would be the idea and the strongest of the 3 trends.

The difficulty is the same charts that I see that suggest that short duration, small bounce are not far from the shorter term charts in which a move to the downside (as expressed by the VXX weekly call position being opened yesterday) so there's not a very clear pivot and as a simple matter of relative performance, some of these timeframes are together in certain averages, but bleed to the next longest or next shorter timeframe in another average.

In short, the clarity is not there that gives me the confidence to say, "This is a trade", that wasn't there for long positions yet anyway, that would only be known once we saw how underlying trade reacted to a pullback, at that point it would be easier to decide whether some hitch-hiking longs were worth the risk or not.

So I may still open a position or two before the close, but I don't want to do it in the smoke of the post FOMC volatility that is often very misleading and I don't want to do it without being able to point to very strong objective data.

I think in this case it's best to be patient, if the trade is not jumping off the charts, there's no good reason to enter it other than greed or trying to force a trade, a trade shouldn't be forced, it should show very high probabilities and a good set up.

This is what I'm looking at and waiting for a clearer signal.

As I often say and always remind myself, there are probabilities and then there are high probability, low risk trades with excellent entries. Knowing what a probability is does not equate a successful trade, the entry, the duration, the target and asset that is chosen are all factors.

I'll let you know if I see anything that is screaming, I do like the AAPL short that I posted, but I haven't taken that yet either just because the asset (AAPL) is most likely going to move with the market, not the other way around (although because of AAPL's weight that's not the best example).

I'll also have a market wrap up tonight taking a much closer look at all of this.