Dow, S&P close up more than 1%, post biggest reversal in 4 years

i960 · Oct 2, 2015

Eddiemorra said:
Could have turned into a strong trend day, though. I think that's what most were expecting, and so were probably shorting that area at 10.30ET as a pullback into a potential further drop.

They'd be shorting it only if they:

* Ignored the multiple prior session's action leading up to this point (strength/basing).
* Ignored overly bearish sentiment and the fact that there's heaps of shorts for the market to punish at this point.
* Ignored the fact that it was forming a great rounding bottom and had tested 1883 multiple times with strength present.
* Actually believed that after it getting slayed by the NFP number it would just keep selling off in an obvious fashion even though the news (a typical shit-show circus) was out and done.

sculptor66 · Oct 2, 2015

heavenskrow said:
I'm curious as to how all the traders on this forum traded it. Did you expect this big of a reversal? Were you up/down for the day? Did you allow your mind to be opened enough for this reversal? Did you get in long at bottom and hold it all day? Or were you selling when market kept going higher??

On a side note, paper kept bidding it higher after the cash close. Interesting.

I went short the YM after the open, betting on a further meltdown. When the market accelerated a bit to the downside but couldn't break the support, I moved my stop very close. Got out with a minimal loss. However, I completely missed the move to the upside.

heavenskrow · Oct 3, 2015

i960 said:
They'd be shorting it only if they:

* Ignored the multiple prior session's action leading up to this point (strength/basing).
* Ignored overly bearish sentiment and the fact that there's heaps of shorts for the market to punish at this point.
* Ignored the fact that it was forming a great rounding bottom and had tested 1883 multiple times with strength present.
* Actually believed that after it getting slayed by the NFP number it would just keep selling off in an obvious fashion even though the news (a typical shit-show circus) was out and done.

View attachment 157620

There is a lot to be learned just from that picture alone, if every trader on this forum contributed to the day's tape, so much valuable knowledge will be gained. But everyone doesn't want their secrets revealed =p

lawrence-lugar · Oct 3, 2015

heavenskrow said:
There is a lot to be learned just from that picture alone,
But everyone doesn't want their secrets revealed =p

-- if a trader is sharing their so-called 'secrets' and plans and lessons...then it basically doesn't work.

i960 · Oct 3, 2015

Even if that green area failed it simply doesn't matter. Everyone should be attempting a long right there. 3 attempts to break support and they all fail plus a higher high after that on obvious strength. It seriously doesn't get more straightforward than that.

Here's also a perfect case where constant volume charts benefit - the smoothness to the buying all the way up reveals program buying behind it. Put that shit on cruise control.

lawrence-lugar said:
-- if a trader is sharing their so-called 'secrets' and plans and lessons...then it basically doesn't work.

Not really revealing anything here that isn't directly obvious to anyone who's done this for a while. Most traders have issues due to a whole host of other reasons anyway.

Eddiemorra · Oct 3, 2015

i960 said:
They'd be shorting it only if they:

Cheers.

For what it's worth, I actually bought it too and posted it live in my 'journal'. My reason was it looked like a cup'n handle formation.

However, I've stared watching stocktwits and monitoring the posts on the ES/SPY feeds.
Pretty much everyone was shorting it on every bounce (10.20, 10.45 etc), expecting continuation down and a likely down trend day and so were caught on the wrong side of that rally and later stopped out.

i960 · Oct 3, 2015

Eddiemorra said:
However, I've stared watching stocktwits and monitoring the posts on the ES/SPY feeds.
Pretty much everyone was shorting it on every bounce (10.20, 10.45 etc)

There's only a few traders I trust on ST. The vast majority of it is dumb money and should be interpreted as such - particularly within the SPY stream where the majority is usually wrong.

In fact that sentiment indicator they have has been great for the expectation that there will indeed be a short squeeze.

What you'll find is that a lot of traders "in the know" keep it to themselves.

Eddiemorra · Oct 3, 2015

i960 said:
There's only a few traders I trust on ST.

What are the names of the good ones? (PM me if you'd rather)

Signate67 · Oct 3, 2015

I went short ES before data covered 2 points off low. Then proceeded to short it at 1915, but in 2 lots as opposed to the 1 lot that I had for the initial short. Am still short the 2 lots. I will stay short I believe for a few days.

trickshot · Oct 3, 2015

heavenskrow said:
I'm curious as to how all the traders on this forum traded it. Did you expect this big of a reversal? Were you up/down for the day? Did you allow your mind to be opened enough for this reversal? Did you get in long at bottom and hold it all day? Or were you selling when market kept going higher??

On a side note, paper kept bidding it higher after the cash close. Interesting.

I was short the day before NFPR and I pretty much covered near day lows, was thinking this will probably bounce a little but still close in negative territory for the day so I went out to attend to some personal matters shortly after I closed my position. Imagine the shock I got when I came back and saw that SPX had closed 27 points higher. Thats a near 60 point intraday reversal, similar to the crazy swings we got on Aug 24. A lot of money was made or lost on this day.