Timing Off By a Day

There is still that fear of missing out on the next uptrend, even during a topping process.  It will provide the bounces that are profitable to short for the next few months.  There is an upside and a downside to the tendency to panic quickly, both on the way down and on the way up.  The upside is that it provides more short term trading opportunities.  The downside is that the jumpy, quantum leaps up and down make it riskier to fade the short term trend with leveraged positions.  Essentially, due to the low bucket shop margin requirements, futures trading is hyper leveraged trading disguised as a hedging tool. 

What happened on Tuesday was what I was expecting for Monday, so when Monday was actually a down day, I rewrote the trading plan and it cost me.  Just because my timing was off.  There were a lot of points to be made on Tuesday that I missed because I doubted my previous forecast because of one small down day.  I did not expect the market to delay the oversold rally by a day, skipping Monday and instead deciding that Tuesday was a better day to buy. 

Sometimes these things happen, when I forecast the market to go a certain direction, and when it doesn't happen in the expected time frame, I change the forecast.  Often times, the forecast is correct, just the timing is off by a few days, as the market takes its time when making a move.  That doesn't match my general observation that the markets in recent years move faster towards their price targets and don't give traders much time to jump on board the trend. 

There is a lesson to be learned from this.  It is to to put on a position a little early, even just 1/3 to 1/2 size, just in case my forecast for the timing of a move is off by a day or two. 

Now that SPX is above 2800, we are right in the post panic sell area. If the SPX stays under 2840 this week, that rules out a V bottom, and we should look to short on Friday for a move back down to 2740-2750 for next week.   Just to stay out out potential trouble in a V bottom scenario, I will not be shorting today or tomorrow.  I don't want to go long unless there is another flush out of yesterday's buyers.  So nothing much to do in SPX for the next 2 days.