Trade Perspective

As I said last night/yesterday, if I'm to put out any new trades or close some, this is all in the context of very short term trades, not having anything to do with core positions and not having anything to do with any changes in opinion or data, it's simply trading on a shorter term basis and only for the trading portfolio and maybe some options in some situations.

Therefore I want to give a little perspective to reinforce this point because in the past when I've taken very short duration long trades it has caused some confusion for some members thinking I've changed my primary analysis which isn't the case.

For example, just looking at the QQQ, most trades that "may " be taken on the long side will be in the 1-5 min positive area, I don't think they can get much further than that. The longer the timeframe, the stronger the signal.

First, these trades are not for everyone, there's nothing wrong with sitting in some of the positions we are in like SRTY (3x short IWM) and just riding out a correction, if you don't have the time, risk appetite or feel comfortable, it's better to just wait on the sidelines, the probabilities are still with these trades seeing more downside, but everything corrects and the trades I'm talking about are more about trading the corrections if there's good reason.

QQQ 2 min, from very negative to in line which is better 3C relative performance, but don't forget this is a very short term chart and very short term and not very powerful signals.

The same is true of the 3 min chart, this is the range where most of these short duration trades would be made, 1-5 min  charts.

 The more important charts like this 10 min  say, even if there is a correction, the probabilities are after it ends, the market heads lower.

This 15 min chart says the same

As does this hourly chart.

The most aggressive trading stance would be to trade some long positions on a short duration trade and then re-open the current short positions as the long trade starts to end.

The next most aggressive position is just sitting tight, letting the market bounce (if it can) and entering or adding to short positions as that bounce nears its end.

The least aggressive and the longer term, higher probability perspective is to just ride out a correction without making any changes, this is perfectly acceptable, if anything were to change so drastically that this course of action would be endangering positions, I'd let you know.

The first thing I would do in the trading portfolio and/or the options portfolio in certain cases would be to lock in profits and raise cash, then from there I'd make decisions about whether it makes sense to enter counter probability long positions.

I hope this makes things a bit more clear, basically all we are doing is adding some more short term trading to the mix, but it doesn't change anything about our analysis and core positions at all.