Market Situation

Today is a tough day because the market is nothing like all areas of life. For instance, most of us were brought up to think that if we didn't pass with 80%, we were sub-par, pretty bad students, the same doesn't apply in the markets, it's a lifelong conditioning program that we've all faced and we approach the markets thinking we need 80+% to be an even subpar trader, that will get you in to more trouble quicker than anything, people go broke all the time taking small profits so they can feel like they are right more than they are wrong, that's one reason why we ask, "Do you want to make money or do you want to be right?"

Another misconception that applies very well today is the hard work narrative, most of us feel that in order to get ahead we need to work harder and as a result that means in the market, you need to find a trade ecvery day or every hour and this is more wrong-headed than the above.

To be successful in the market you do need hard work, but not in the same way, always being a busy body leads to something called over-trading at the minimum or entering positions at the exact wrong time more often than not.

The time to exit puts or short term shorts was last week and Friday specifically, the time to buy longs or hedges was Friday, not today, not to chase the market so today is a patience day which is even harder than the hard work narrative for many of us because we equate doing nothing with "Not getting ahead", but patience in the market is probably the number one personality trait of successful traders.

Today is a patience day, this is why I talked about market trades (opening or closing them) a lot Friday, but not at all today, it's the wrong time.

I've looked at a lot of individual stocks today to see if there were any decent set-ups, they're all too risky, if they weren't entered last week/Friday, it's too late as far as I'm concerned from a risk perspective and it was already risky entering at the best possible price level Friday.

Here are a few charts.

 SPY 2 min and the yellow box, that was the place to enter a SPY call, a speculative one or just sit back and let the market do its thing and be patient if you prefer, I only opened 2 positions, but took a lot of profits off the table Friday.


 At 5 mins there's no positive in any of the averages, this alone is reason enough to consider this market too risky for longs, this is why I used options with all of their leverage, because as of now, I don't expect much based on a chart like this, I do expect something, but not something worth really positioning in to.

The SPY 60 min is the probabilities, it's the trend, it's where we are other than very short term timing, it's the reason I want my portfolios leaning at least 80% short.

The IWM 3 mins doesn't even have a clear positive today, WHY IN THE WORLD WOULD I CHASE THIS AFTER A GAP UP WITH SUCH A HORRIBLE CHART?

The 1 min chart tells me we're likely to see some more upside as has been expected since last week, but the 3 min chart tells me it's not the probabilities you invest in in any meaningful way. If I wasn't already 80% or more short, I'd NEVER have opened those QQQ/IWM calls.

The QQQ 3 min and the box where the long entry was, anything after that is chasing and there's nothing positive after this 3 min chart. This is why I've looked at things like GLD and GDX, assets that don't have a strong market correlation right now.

The QQQ 1 min and Friday's entry, it's not worth chasing now, but it does tell us probabilities are for more upside, this is one of those times we need to decide what probabilities are worth as far as risk vs "High probabilities and low risk", for me it's worth exactly what I did Friday and today, action on Friday, patience today and looking forward to the next set of trades that happen when this mini cycle ends.

 REMEMBER FOR ME THIS HASN'T BEEN ABOUT THE MARKET AS USUAL, THIS IS ABOUT THE VIX FUTURES. 3 min VXX negative and a move down, it needs to move down to be accumulated, the accumulation is our signal so things are moving the way we expected and need them to, but they need more time. That red box to the far right tells me that VXX has more downside most likely.

However as I pointed out earlier today, the 1 min chart looks like accumulation has "STARTED" today, I wanted to see migration to be sure...

The 2 min chart shows that, but right where stops would have been hit early in the day, we still have more downside and a reversal process plus the VXX flying divergences that only VXX provides, that's when we take our next major action, much stronger than anything last week.

However until then, sitting and being patient isn't being lazy, it's not trying to force something that isn't meant to be right now, IT'S BEING SMART.

THAT'S WHERE WE ARE.