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SharePlanner (< 20)

Day-Trading SPY

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May 26, 2010 – Comments (2) | RELATED TICKERS: SPY

I haven't dissected a trade of mine in quite some time for everyone. While I give out my trade setups in great detail, I could probably do a better job of giving a post game report on each of them. So, going forward, I'll try my hardest to do exactly that because, for one, it helps you understand the art of managing the trade, my successes and pitfalls, and secondly, it makes me take a greater in-depth examination of how I handled the trade, when I act like a Monday-Morning Quarterback.

In the chart below, I made a day-trade in SPY. The yellow line might find you scratching your head a bit, but let me explain: there was a trend line on the S&P e-mini futures that went back to 6am on Tuesday morning lows. The trend line was a thing of beauty on the 5min chart, marked with higher-lows and higher-highs. But at about 11:30am today, that trend line was broken and I waited for a retracement back up to the underside of that trend line to initiate my trade. I used the high of the day as my stop-loss and a fill of the gap from this morning as my target price (gaps typically are filled statistically, about 80% of the time).

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2 Comments – Post Your Own

#1) On May 26, 2010 at 11:41 PM, 1315623493 wrote:

My current SPY trade is:

3 December 2010 $100 Call Options

8 December 2010 $99 Put Options

The position's net delta is -73.19 which means that this position will make far more on downside movement than upside. Yes, I am bearish on the S&P500. The Euro debt crisis and global growth slowdown is just too much for a resumption of an uptrend. The Dow also broke a psychological level of 10,000 to the downside indicating bearish momentum. It's nice to be a bear at this moment. 

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#2) On May 27, 2010 at 12:09 AM, SharePlanner (< 20) wrote:

Oh yes - I agree with you - I think we will see a bit of a bounce in the next couple of weeks, but after that, there will be hell to pay for holding stocks long.

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