"I'd like to see this morning's opening indications as some of the gaps have taken out the last 2 days trade, but if I were to engage in fading the opening gap, it would be in the SPY and maybe the IWM, not so much the QQQ at this point until we see something. ES and TF at least have small intraday divergences on the open"
"and I wouldn't be attached to it too long.... (to the trades).
As you can tell from the above excerpts, on a fade of the gap down (remember market makers and specialists as well as HFT taking over those roles had a lot of inventory from yesterday's closing levels and the gap down that took out the intraday lows of the last 2-days) the SPY and IWM were my favorites, the IWM turned out to be the best performer by far.
However by 11 a.m. I was already posting distribution in Fade Trade Update
"The gap fill in the averages (which in 3 of 4 took out the lows of the last 2 days on the open) is coming along with intraday negatives as the averages pass the gap area, they seem to be getting worse so I figured a warning is appropriate ...The SPY divergence especially has been moving the fastest."
By 11 a.m. the move was for all intents and purposes done. You could have made a little more through the close, but the market exposure risk at that point in my view wasn't worth an extra +.005% in the IWM and almost nothing as the SPY and Q's were essentially flat from there.
Another post was put out at 12:14 p.m. Fade Divergences are Worse, by this time there was no edge in staying in the trade.
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