It is very difficult for me t say though, "Short here" if we are trying to thread the needle. If you are interested in the broader perspective and highest probabilities, than as long as you have the risk tolerance and emotional ability to deal with days like yesterday, then by all means, this is your place.
The move yesterday and today gave you significant advantage on entering new or add-to shorts.
The reason I can't or don't feel comfortable saying, "right here" which I may at some point with signals that are screaming as we are already broadly in line with our forecast as the IWM starts to create a bull trap which I believe is capable of adding more, is the fact that the base for this move is so unstable.
I have a very high risk tolerance, which I suppose is one of the reasons I can sit in my fully short personal positions through a day like yesterday and not lose a wink of sleep, so long as probabilities are on my side.
As a professional trader being my ONLY means of income with a rather sizable monthly bill to carry and all of my net-worth in my trading account other than my home (which I understand is relative to each of us, but for me, relative to my trading account it was a wonder I could make it) I would make between 100 and 200 trades a week on average which is why my broker agreed to lower my commissions. If you took the weekly transaction costs alone, I could pay my monthly bills easily most weeks (i.e. my discounted commission because of so many trades was still between $600 and $1200 a week in transaction costs not including slippage in my fills). My point being, I had little problem taking on trades such as yesterday's with a very high risk tolerance, often carrying short term day trading positions of over 15% of my account overnight. However, even I was not keen to take on a trade I believed with all of my heart would make at least IWM $118, almost +13% in 2 days (using the typical 3x leveraged ETFs I'm fond of).
The reason as mentioned before, the base was not solid and as such prone to sudden failure especially upon any unforeseen (non-discounted news) . This particular market and this move are so unstable that I could easily imagine waking up to a gap that erased 50-100% of yesterday's gains and most people who make sizable money in a short period are very slow to sell such positions, not wanting to believe it is possible such a strong move could fail so fast, leaving them with the largest losses of all.
In any case, my point is it's difficult to say, "This is the exact area I'd enter shorts" beyond the broader perspective that I hold because of such an unstable base.
Intraday since I gave you the baseline for the averages , Index futures, and levers, this is what has happened so far. In almost all cases, there's an increased degree of distribution and the levers are quickly fading.
I am not calling for the sky to fall at this moment, but everything is quickly moving to undo the support built since Friday.
This will be a bull trap and will take the market lower. Ironically the higher the market and IWM in particular move, the stronger the bull trap and deeper the decline, just like Monday's downside move is what created the short squeeze momentum yesterday that saw small cap IWM stocks see their best short squeeze performance in 3 years.
Price is very deceptive, what seems like a bearish move is actually creating a bullish one and what is a bullish move is creating a bigger bearish drop.
It's all in the underlying trade and our other indicators, everyone else has to rely on what price shows them and the indicators that use price.
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